Nordic Avionics makes aircraft instrumentation. Its basic navigation radio requires $ 60

$60 in variable costs and $ 2 comma 000

$2,000 per month in fixed costs. Further processing theradio, to enhance itsfunctionality, will require an additional $ 25

$25 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 $ 260

$260 to $ 280

$280. If Nordic decides to further process theproduct, operating income would________.

A.

decrease by $ 5

$5 per unit

B.

increase by $ 25

$25 per unit

C.

increase by $ 85

$85 per unit

D.

remain the same