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Wing Company makes a special kind of racing tire. Variable costs are $ 330, and...

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Accounting

Wing Company makes a special kind of racing tire. Variable costs are $ 330, and fixed costs are $ 35 comma 000 per month. Wing sells 600 units per month at a sales price of $ 400. If Wing upgrades the quality of the tire, management believes that the sales price can be increased to $ 470. If so, the variable cost will increase to $ 370, and the fixed costs will rise by 31%. The CEO wishes to increase his operating income by 20%. If the company decides to upgrade the product, the CEO will reach his goal.

True

False

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