Nordin Avionics Makes Aircraft Instrumentation

question 158

Multiple Choice

Nordin Avionics makes aircraft instrumentation. Their basic navigation radio requires $80 in variable costs and requires $2,000 per month in fixed costs. If they process the radio further to enhance its functionality, it will require an additional $25 per unit of variable costs, plus an increase in fixed costs of $800 per month. The marketing manager believes they would be able to boost their price of the radio from $260 to $300. Nordin sells 30 radios per month. If they decide to process further, what would the impact be on monthly operational income?

• A) It would increase by $1,050.
• B) It would increase by $250.
• C) It would decrease by $350.
• D) It would decrease by $750.

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