Nordic Avionics Makes Aircraft Instrumentation

Nordic Avionics makes aircraft instrumentation.Its basic navigation radio requires $80 in variable costs and $4,000 per month in fixed costs.Further processing the radio,to enhance its functionality,will require an additional $27 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 $280 to $300.If Nordic decides to further process the product,operating income would ________.

A) remain the same
B) increase by $27 per unit
C) increase by $107 per unit
D) decrease by $7 per unit

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