Arlo Company Makes Bulk Quantities of Cleaning Fluids

Arlo 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 disinfectant, they could charge $25 per unit for the improved product. It would cost them a total of $3,800 per month to make that alteration. If so, what would be the effect on operational income?

A) It would decline by $1,200.
B) It would increase by $3,000.
C) It would increase by $400.
D) It would decline by $800.

Correct Answer:

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