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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Definitions:

Pricing Enhancement

Strategies implemented to adjust and improve the perceived value and price positioning of a product or service in the market.

Obscenity

Content or actions deemed offensive to morality or decency by the average person, according to community standards, often subject to legal regulation.

Morality

Principles concerning the distinction between right and wrong or good and bad behavior.

Decency

The standard of behavior that is considered respectful and modest by a society.