A company produces 1,000 packages of cat food per month. The sales price is $4.00...
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A company produces 1,000 packages of cat food per month. The sales price is $4.00 per pack. Variable cost is $1.60 per unit, and fixed costs are $1,800 per month. Management is considering adding a vitamin supplement to improve the value of the product. The variable cost will increase from $1.60 to $1.80 per unit, and fixed costs will increase by 10%. The company will price the new product at $8 per pack. How will this affect operating income? A. Operating income will increase by $3,620 per month. B. Operating income will decrease by $3,620 per month. C. Operating income will remain unchanged. D. Operating income will decrease by $2,020 per month. O O
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