Nordin Avionics Makes Aircraft Instrumentation

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 marketing manager is sure they can charge a higher price for the improved version. At what price level would the newer, improved radio begin to improve operational earnings? (Please round to nearest whole dollar.)

A) At a price of $312 or higher
B) At a price of $309 or higher
C) At a price of $420 or higher
D) At a price of $295 or higher

Correct Answer:

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