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both of these were answered by Chegg previously and its showing as incomplete answer Radar Company sells bikes for $510 each. The company currently sells
both of these were answered by Chegg previously and its showing as incomplete answer
Radar Company sells bikes for $510 each. The company currently sells 4,300 bikes per year and could make as many as 4,660 bikes per year. The bikes cost $250 each to make: $185 in variable costs per bike and $65 of fixed costs per bike. Radar receives an offer from a potential customer who wants to buy 360 bikes for $470 each. Incremental fixed costs to make this order are $70 per bike. No other costs will change if this order is accepted. (a) Compute the income for the special offer. (b) Should Radar accept this offer? (a) Special offer analysis Per Unit Incremental Fixed Costs Total Sales $ 470 Variable cost 185 Contribution margin $ 285 Fixed costs $ 70 Income 215 (b) The company should Accept special offer Gelb Company currently makes a key part for its main product. Making this part incurs per unit variable costs of $2.15 for direct materials and $1.70 for direct labor. Incremental overhead to make this part is $1.78 per unit. The company can buy the part for $5.97 per unit. (a) Prepare a make or buy analysis of costs for this part. (Enter your answers rounded to 2 decimal places.) (b) Should Gelb make or buy the part? Make Buy (a) Make or Buy Analysis Direct materials $ 2.15$ 0.00 Direct labor 1.70 0.00 0.00 Overhead Cost to buy Cost per unit 1.78 0.00 5.63 $ Cost difference $ 0.34 (b) Company should Make
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