Nordic Avionics Makes Aircraft Instrumentation

question 50

Multiple Choice

Nordic Avionics makes aircraft instrumentation.Their basic navigation radio requires $90 in variable costs and $3000 per month in fixed costs.Nordic sells 20 radios per month.If they process the radio further 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 price of the radio is $270.The CEO wishes to improve operating profit by $1100 per month by selling the enhanced version of the radio.In order to hit his target,the price to be charged for the enhanced product is:

• A) $390 per unit.
• B) $300 per unit.
• C) $105 per unit.
• D) $375 per unit.

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