Question: Pegasus Avionics makes aircraft instrumentation. Its basic navigation radio requires 590 in variable costs and $3,000 per month in foxed costs. Pegasus sells 10 radios

Pegasus Avionics makes aircraft instrumentation. Its basic navigation radio requires 590 in variable costs and $3,000 per month in foxed 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 eamings? (Round to the nearest whole dollar) O A. at a sales price of $407 OB. at a sales price higher than $344 OC. at a sales price of $290 O D. at a sales price lower than 5290
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
