Viper Avionics Makes Aircraft Instrumentation

Multiple Choice

Viper Avionics makes aircraft instrumentation.Its basic navigation radio requires $80 in variable costs and $2000 per month in fixed costs.Further processing the radio,to enhance its functionality,will require an additional $25 per unit of variable costs,plus an increase in fixed costs of $800 per month.The marketing manager believes that they would be able to increase the sales price of the radio from $260 to $300.Viper sells 30 radios per month.If Viper decides to further process the radio,monthly operating income would ________.

A) increase by $1200
B) increase by $3950
C) decrease by $350
D) decrease by $3950