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Victory Tire Company makes a special kind of racing tire. Variable costs are exist210 per unit, and fixed costs are exist30,000 per month. Victory sells
Victory Tire Company makes a special kind of racing tire. Variable costs are exist210 per unit, and fixed costs are exist30,000 per month. Victory sells 700 units per month at a sales price of exist300. If the quality of the tire is upgraded, the company believes it can increase the sales price to exist325. If so, the variable cost will increase to exist230 per unit, and the fixed costs will remain the same. If Victory decides to upgrade, how will it affect operating income? A. Operating income will increase by exist14,000. B. Operating income will increase by exist3, 500. C. Operating income will decrease by exist14,000. D. Operating income will decrease by exist3, 500
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