A Company Produces 1,000 Packages of Chicken Feed Per Month

A company produces 1,000 packages of chicken feed per month.The sales price is $6 per pack.Variable cost is $1.50 per unit,and fixed costs are $1,600 per month.Management is considering adding a vitamin supplement to improve the value of the product.The variable cost will increase from $1.50 to $2.50 per unit,but there will be no change in fixed costs.The company will price the new product at $4.50 to compete with other products.How will this affect operating income?

A) Operating income will decrease by $2,500 per month.
B) Operating income will increase by $2,500 per month.
C) Operating income will decrease by $1,600 per month.
D) Operating income will remain unchanged.