Carlo Company makes bulk quantities of cleaning fluids. They currently sell 1,000 containers a month at a price of $22 per unit. If they added a newer scent, they could charge $22.75 per unit for the improved product. It would cost them a total of $700 per month to make that alteration. What would be the effect on operating income?
It would increase by $300.
It would decline by $120.
It would increase by $50.
It would decline by $800.