Question
Nordic Avionics makes aircraft instrumentation. Their basic navigation radio requires$80 in variable costs and requires$2,000 per month in fixed costs. Nordic sells 30 radios per
Nordic Avionics makes aircraft instrumentation. Their basic navigation radio requires$80 in variable costs and requires$2,000 per month in fixed costs. Nordic sells 30 radios per month. If they process the radio further to enhance itsfunctionality, it will require an additional$25 per unit of variablecosts, plus an increase in fixed costs of$800 per month. The current price of the radio is$260. The marketing manager is sure that they can charge a higher price for the improved version. At what price level would thenew, improved radio begin to improve operationalearnings? Round to nearest whole dollar.
A. at a price of $309 or higher
B. at a price of higher than $312
C. at a price of lower than $420
D. at a price of $295 or higher
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