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Victory Tire Company makes a special kind of racing tire. Variable costs are $220.00 per unit, and fixed costs are $10,000.00 per month. Victory sells
Victory Tire Company makes a special kind of racing tire. Variable costs are $220.00 per unit, and fixed costs are $10,000.00 per month. Victory sells 600 units per month at a sales price of $310.00. If the quality of the tire is upgraded, the company believes it can increase the sales price to $350.00. If so, the variable cost will increase to $230.00 per unit, and the fixed costs will remain the same. If Victory decides to upgrade, how will it affect operating income? O A. Operating income will increase by $6,000.00. B. Operating income will increase by $18,000.00. O C. Operating income will decrease by $18,000.00. OD. Operating income will decrease by $6,000.00
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