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 $4.00 per pack.Variable cost is $1.50 per unit,and fixed costs are $1,700 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 $1.90 per unit,and fixed costs will increase by 20%.The company will price the new product at $5 per pack.How will this affect operating income?

A) Operating income will decrease by $260 per month.
B) Operating income will remain unchanged.
C) Operating income will decrease by $1,240 per month.
D) Operating income will increase by $260 per month.