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Supersonic Tire Company makes a special kind of racing tire. Variable costs are$210 perunit, and fixed costs are$42,000 per month. Supersonic sells 400 units per

Supersonic Tire Company makes a special kind of racing tire. Variable costs are$210 perunit, and fixed costs are$42,000 per month. Supersonic sells 400 units per month at a sales price of$320. If the quality of the tire isupgraded, the company believes it can increase the price to$350. Ifso, the variable cost will increase to$220 perunit, and the fixed costs will rise by20%. If Supersonic decides toupgrade, how will operating income beaffected?

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