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? (Hint: Compare the increase in revenue to the increase in cost.)

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