Odin Avionics makes aircraft instrumentation.Its basic navigation radio requires $90 in variable costs and $2,000 per month in fixed costs.Odin sells 30 radios per month.If the company further processes the radio,to enhance its functionality,it will require an additional $25 per unit of variable costs,plus an increase in fixed costs of $800 per month.The current sales price of the radio is $260.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 $312
B) at a sales price of $260
C) at a sales price lower than $260
D) at a sales price of $375
Correct Answer:
Verified
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