Question: Nordic Avionics makes aircraft instrumentation. Its basic navigation radio requires $80 in variable costs and $4,000 per month in fixed costs. Further processing the radio,

Nordic Avionics makes aircraft instrumentation. Its basic navigation radio requires $80 in variable costs and $4,000 per month in fixed costs. Further processing the radio, to enhance its functionality, will require an additional $27 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 $280 to $300. If Nordic decides to further process the product, operating income would ________.

decrease by $7 per unit

increase by $27 per unit

increase by $107 per unit

remain the same

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