When an employee from a temporary help agency is hired, the agency is responsible for paying the employee's payroll taxes, Social Security benefits, etc

The transfer price should be an amount between the market price and the variable cost

Indicate whether the statement is true or false

Victory Tire Company makes a special kind of racing tire

Variable costs are $210 per unit, and fixed costs are $30,000 per month. Victory sells 700 units per month at a sales price of $310. If the quality of the tire is upgraded, the company believes it can increase the sales price to $350. If so, the variable cost will increase to $240 per unit, and the fixed costs will remain the same. If Victory decides to upgrade, how will it affect operating income? A) Operating income will decrease by $7,000. B) Operating income will decrease by $21,000. C) Operating income will increase by $21,000. D) Operating income will increase by $7,000.