Malmo Avionics Makes Aircraft Instrumentation

Malmo Avionics makes aircraft instrumentation.Its basic navigation radio requires $60 in variable costs and $5,000 per month in fixed costs.Further processing the radio,to enhance its functionality,will require an additional $28 per unit of variable costs,plus an increase in fixed costs of $290 per month.The marketing manager believes that they would be able to increase the sales price of the radio from $290 to $310.Malmo sells 45 radios per month.If Malmo decides to further process the radio,monthly operating income would ________.

A) increase by $900
B) increase by $4,250
C) decrease by $650
D) decrease by $4,250

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