Starforce Avionics Makes Aircraft Instrumentation

question 84

Multiple Choice

Starforce Avionics makes aircraft instrumentation.Its basic navigation radio requires $80 in variable costs and $5000 per month in fixed costs.Further processing the radio,to enhance its functionality,will require an additional $28 per unit of variable costs but no change to the fixed costs.The marketing manager believes that the company would be able to increase the sales price from $290 to $310.If Starforce decides to further process the product,operating income would ________.

• A) remain the same
• B) increase by $28 per unit
• C) increase by $108 per unit
• D) decrease by $8 per unit

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Definitions:

Limited Partnership

A form of partnership comprising at least one general partner, who manages the business and is personally liable for partnership debts, and one or more limited partners, who contribute capital and share in profits but are not involved in management and are only liable to the extent of their investment.

Limited Personal Liability

Limited personal liability means that an individual's financial responsibility for business debts or legal claims is restricted, often to the amount they have invested in a company.

Partners

Individuals who share ownership in a business, contributing resources or expertise and sharing profits and losses.

RULPA

The Revised Uniform Limited Partnership Act, which is a standardized set of laws to regulate the formation, operation, and dissolution of limited partnerships in the US.