Nordin Avionics Makes Aircraft Instrumentation

question 49

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. Nordin sells 30 radios per month. 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 current price of the radio is $260. The CEO wishes to improve operational income by $1,000 per month by selling the enhanced version of the radio. In order to hit his target, what price would be needed for the enhanced product? (Please round to nearest whole dollar.)

• A) $212 per unit
• B) $345 per unit
• C) $440 per unit
• D) $367 per unit