Pegasus Avionics Makes Aircraft Instrumentation

Multiple Choice

Pegasus Avionics makes aircraft instrumentation.Its basic navigation radio requires $60 in variable costs and $3000 per month in fixed costs.Pegasus sells 10 radios per month.If the company further processes the radio,to enhance its functionality,it will require an additional $27 per unit of variable costs,plus an increase in fixed costs of $270 per month.The current sales price of the radio is $290.The marketing manager is sure that Pegasus can charge a higher sales price for the improved version.At what sales price level would the new,improved radio begin to improve operating earnings? (Round to the nearest whole dollar.)

A) at a sales price higher than $344
B) at a sales price of $290
C) at a sales price lower than $290
D) at a sales price of $377