Wing Company Makes a Special Kind of Racing Tire

question 149

True/False

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.

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Definitions:

Obsessive-compulsive

Pertaining to a disorder characterized by intrusive thoughts that produce uneasiness (obsessions) and behaviors (compulsions) aimed at reducing anxiety.

Vacuum

A space entirely devoid of matter, or a situation characterized by the absence of something that would normally be present.

Compulsive Behaviors

Actions performed repeatedly and excessively as a result of an irresistible urge, often related to obsessive-compulsive disorder.

Religious Rituals

Ceremonies or practices performed in accordance with the beliefs of a religion.