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Mickey Tire Company makes a special kind of racing tire. Variable costs are $ 260$260 per unit, and fixed costs are $ 35 comma 000$35,000
Mickey Tire Company makes a special kind of racing tire. Variable costs are $ 260$260 per unit, and fixed costs are $ 35 comma 000$35,000 per month. Mickey sells 700700 units per month at a sales price of $ 345$345. If the quality of the tire is upgraded, the company believes it can increase the sales price to $ 380$380. If so, the variable cost will increase to $ 280$280 per unit, and the fixed costs will rise by 3030%. If Mickey decides to upgrade, how will operating income be affected?
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