Question
Starforce Avionics makes aircraft instrumentation. Its basic navigation radio requires $ 80$80 in variable costs and $ 5 comma 000$5,000 per month in fixed costs.
Starforce Avionics makes aircraft instrumentation. Its basic navigation radio requires
$ 80$80
in variable costs and
$ 5 comma 000$5,000
per month in fixed costs. Further processing the radio, to enhance its functionality, will require an additional
$ 28$28
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
$ 290$290
to
$ 310$310.
If Starforce decides to further process the product, operating income would ________.
A.decrease by
$ 8$8
per unit
B.
remain the same
C.increase by
$ 108$108
per unit
D.increase by
$ 28$28
per unit
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