Wing Company Makes a Special Kind of Racing Tire

Wing Company makes a special kind of racing tire. Variable costs are $320, and fixed costs are $35,000 per month. Wing sells 600 units per month at a price of $400. If Wing upgrades the quality of the tire, they believe they can boost the price to $450. If so, the variable cost will go up to $350 and the fixed costs will rise by 30%. The CEO wishes to increase his operational income by 20%. If the company decides to upgrade the product according to the data above, the CEO will reach his goal.