Celaneo Avionics Makes Aircraft Instrumentation

question 10

Multiple Choice

Celaneo Avionics makes aircraft instrumentation.Its basic navigation radio requires $80 in variable costs and $3000 per month in fixed costs.Celaneo sells 20 radios per month.If the company further processes the radio,to enhance its functionality,it will require an additional $30 per unit of variable costs,plus an increase in fixed costs of $400 per month.The current sales price of the radio is $270.The CEO wishes to improve operating income by $1100 per month by selling the enhanced version of the radio.In order to meet this target,the sales price to be charged for the enhanced product is ________.

• A) $300 per unit
• B) $375 per unit
• C) $105 per unit
• D) $380 per unit

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