Odin Avionics Makes Aircraft Instrumentation

Odin Avionics makes aircraft instrumentation.Its basic navigation radio requires $60 in variable costs and $4,000 per month in fixed costs.Odin sells 10 radios per month.If the company further processes the radio,to enhance its functionality,it will require an additional $28 per unit of variable costs,plus an increase in fixed costs of $280 per month.The current sales price of the radio is $300.The marketing manager is sure that Odin can charge a higher sales price for the improved version.At what sales price level would the new,improved radio begin to improve operating earnings? (Round to the nearest whole dollar.)

A) at a sales price higher than $356
B) at a sales price of $300
C) at a sales price lower than $300
D) at a sales price of $388

Correct Answer:

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