Nordic Avionics makes aircraft instrumentation. Their basic navigation radio requires $80 in variable costs and requires $2,000 per month in fixed costs. If they process the radio further to enhance its functionality, it will require an additional $25 per unit of variable costs, but no change to the fixed costs. The marketing manager believes that they would be able to boost their price of the radio from $260 to $280.

If they do so, how would the change affect operating income?

Answer rating: 100% (QA)

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