Verdant Avionics makes aircraft instrumentation.Their basic navigation radio requires $140 in variable costs and requires $4 000 per month in fixed costs.If they process the radio further to enhance its functionality,it will require an additional $20 per unit of variable costs,and $300 per month in fixed costs.The marketing manager believes they would be able to boost their price of the radio from $270 to $300.In making this decision,the amount of additional fixed costs per month is a relevant piece of information.

Question

Quizplus · Accepted Answer

The additional fixed costs of $300 per month are relevant because they affect the overall cost structure and profitability of enhancing the radio's functionality.

Verdant Avionics Makes Aircraft Instrumentation