Nordic Avionics makes aircraft instrumentation.Their basic navigation radio requires $60 in variable costs and requires $3000 per month in fixed costs.If they process the radio further to enhance its functionality,it will require an additional $26 per unit of variable costs,but no change to the fixed costs.The marketing manager believes that they would be able to boost their price of the radio from $270 to $290.If they do so,how would the change affect operating profit?
A) It would go down by $6 per unit.
B) It would go up by $86 per unit.
C) It would go up by $26 per unit.
D) It would remain the same.
Correct Answer:
Verified
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