Question: Viper Avionics makes aircraft instrumentation. Its basic navigation radio requires $80 in variable costs and $5,000 per month in fixed costs. Further processing the radio,

Viper Avionics makes aircraft instrumentation. Its basic navigation radio requires $80 in variable costs and $5,000 per month in fixed costs. Further processing the radio, to enhance its functionality, will require an additional $28 per unit of variable costs, plus an increase in fixed costs of $290 per month. The marketing manager believes that they would be able to increase the sales price of the radio from $290 to $310. Viper sells 45 radios per month. If Viper decides to further process the radio, monthly operating income would:

A. decrease by $5,150

B. increase by $5,150

C. increase by $900

D. decrease by $650

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