Airbolt Avionics makes aircraft instrumentation. Their basic navigation radio requires $ 120 in variable costs and requires $ 3 comma 000 per month in fixed costs. If it processes the radio further to enhance its functionality, it will require an additional $ 20 per unit of variable costs and $ 400 per month in fixed costs. The marketing manager believes the sales price of the radio can be increased from $ 270 to $ 300. In making this decision, the amount of additional fixed costs per month is a relevant cost.
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