Pegasus Avionics makes aircraft instrumentation. Its basic navigation radio requires $60 in variable costs and $3000 per month in fixed 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 earnings? (Round to the nearest whole dollar.)
A) at a sales price higher than $344
B) at a sales price of $290
C) at a sales price lower than $290
D) at a sales price of $377
A) at a sales price higher than $344
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