#5

Radar Company sells bikes for $470 each. The company currently sells 4,100 bikes per year and could make as many as 4,460 bikes per year. The bikes cost $290 each to make: $200 in variable costs per bike and $90 of fixed costs per bike. Radar receives an offer from a potential customer who wants to buy 360 bikes for $440 each. Incremental fixed costs to make this order are $80 per bike. other costs will change if this order is accepted. (a) Compute the income for the special offer. (b) Should Radar accept this offer