Odin Avionics makes aircraft instrumentation. Its basic nvigation radio requires

Question

Odin Avionics makes aircraft instrumentation. Its basic nvigation radio requires $60 in variable costs and $4,000 per month in fixxed cost. Odin sells 10 radios per month. If the company further processess the radio, to enhance its functionality, it will require an additional $28 per unit of variable costs, plus an increase in fixed cost of $280 per month. The current sales price of the radio is $300. The marketing mmanager is sure that Odin can charge a higher sales pricce for the improved version. At what sales price level wouold the new, improved radio begin to improve operating earninig? (Round to the nearest whole number and show work)

A) sales price higher than $356

B) sales price of $300

C) Sales price lower than $300

D) Sales price of $388

Explanation / Answer

A) sales price higher than $356

Minimum sale price=$300+$28+$280/10=$356

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