Nordic Avionics makes aircraft instrumentation. Its basic navigation radio requires

$70

in variable costs and

$4,000

per month in fixed costs. Further processing theradio, 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 ________.

A.

increase by

$97

per unit

B.

increase by

$27

per unit

C.

remain the same

D.

decrease by

$7

per unit