Celaneo Avionics makes aircraft instrumentation. Its basic navigation radio requires $60 in variable costs and $4,000 per month in fixed costs. Celaneo sells 20 radios per month. If the company further processes the radio, to enhance its functionality, it will require an additional $40 per unit of variable costs, plus an increase in fixed costs of $500 per month. The current sales price of the radio is $280. The CEO wishes to improve operating income by $1,200 per month by selling the enhanced version of the radio. In order to meet this target, the sales price to be charged for the enhanced product is A. $380 per unit B. $125 per unit C. $320 per unit D. $405 per unit A small business produces a single product and reports the following data: Sales price Variable cost Fixed cost $8.00 per unit $5.30 per unit $22,000 per month units per Volume 10,000 month The company believes that the volume will go up to 12,000 units if the company reduces its sales price to $7.25. How would this change affect operating income? A. It will increase by $3,600. B. It will decrease by $5,000. C. It will decrease by $3,600. D. It will increase by $5,000. Fuller Industries is considering replacing a machine that is presently used in its production process. Which of the following amounts represents a sunk cost? Replacement Machine $46,000 5 0 age Original cost Remaining useful life in years Current in years Book value Current disposal value in cash Future disposal value in cash (in 5 years) Annual cash operating costs Old Machine $60,000 5 5 $30,000 $9,000 $0 $7,000 $0 $4,000 A. $60,000 B. $30,000 C. $9,000 D. $46,000 Artisan Works is owned and operated by a craftsman who makes replicas of historic firearms for museums, sportsmen, and collectors. The data are as follows: Sales price per unit Variable cost per unit Fixed costs per month $800 470 11,550 If Artisan expects to sell 40 units per month, what is his margin of safety expressed in units per month? O A. 5 units B. 3 units C. 75 units D. 40 units Ambrosia Foods produces a gourmet condiment that sells for $16 per unit. Variable cost is $10 per unit, and fixed costs are $8,000 per month. If Ambrosia expects to sell 1,500 units, compute the margin of safety in units. (Round any intermediate calculations and your final answer to the nearest whole unit.) A. 167 units B. 1,333 units C. 83 units D. 1,500 units