Merrimack Tire Company makes a special kind of racing tire. Variable costs are $ 220$220 perunit, and fixed costs are $ 30 comma 000$30,000 per month. Merrimack sells 500500 units per month at a sales price of $ 300$300. If the quality of the tire isupgraded, the company believes it can increase the price to $ 325$325. Ifso, the variable cost will increase to $ 230$230 perunit, and the fixed costs will rise by 4040%. If Merrimack decides toupgrade, how will operating income beaffected?

Operating income will increase by $ 40$40. B. Operating income will decrease by $ 4 comma 500$4,500. C. Operating income will decrease by $ 12 comma 500$12,500. D. Operating income will increase by $ 12 comma 500$12,500.