Starforce Avionics Makes Aircraft Instrumentation

Multiple Choice

Starforce Avionics makes aircraft instrumentation.Its basic navigation radio requires $80 in variable costs and $5000 per month in fixed costs.Further processing the radio,to enhance its functionality,will require an additional $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 to $310.If Starforce decides to further process the product,operating income would ________.

A) remain the same
B) increase by $28 per unit
C) increase by $108 per unit
D) decrease by $8 per unit