Pegasus Avionics Makes Aircraft Instrumentation

question 195

Multiple Choice

Pegasus Avionics makes aircraft instrumentation.Its basic navigation radio requires $60 in variable costs and $3000 per month in fixed costs.Pegasus sells 10 radios per month.If the company further processes the radio,to enhance its functionality,it will require an additional $27 per unit of variable costs,plus an increase in fixed costs of $270 per month.The current sales price of the radio is $290.The marketing manager is sure that Pegasus can charge a higher sales price for the improved version.At what sales price level would the new,improved radio begin to improve operating earnings? (Round to the nearest whole dollar.)

• A) at a sales price higher than $344
• B) at a sales price of $290
• C) at a sales price lower than $290
• D) at a sales price of $377

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Definitions:

Sublimation

A psychological mechanism by which impulses or fantasies that society deems unacceptable are converted into actions or behaviors that are considered acceptable.

Reaction Formation

A psychological defense mechanism in which an individual unconsciously replaces their true feelings perceived as unacceptable with their opposite.

Projection

A psychological defense mechanism where individuals attribute their own unacceptable thoughts, feelings, or motives to someone else.

Positive Adjustment

The process of adapting positively to circumstances, challenges, and changes, contributing to mental health and well-being.