Variable costs as a percentage of sales for Lemon Inc. are 80%, current sales are $600,000, and fixed costs are $130,000. How much will operating income change if sales increase by $40,000?

A) $8,000 increase
B) $8,000 decrease
C) $30,000 decrease
D) $30,000 increase

What conditions would led employees to this believe pay inequities existed in their organization?