QS 10-15 Special offer LO P7

Radar Company sells bikes for $500 each. The company currently sells 4,200 bikes per year and could make as many as 4,580 bikes per year. The bikes cost $240 each to make: $195 in variable costs per bike and $45 of fixed costs per bike. Radar received an offer from a potential customer who wants to buy 380 bikes for $480 each. Incremental fixed costs to make this order are $49,000. No other costs will change if this order is accepted. Compute Radars additional income (ignore taxes) if it accepts this order.