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QS 25-15 Special offer LO P7 Radar Company sells bikes for $500 each. The company currently sells 4,350 bikes per year and could make as
QS 25-15 Special offer LO P7 Radar Company sells bikes for $500 each. The company currently sells 4,350 bikes per year and could make as many as 4,650 bikes per year. The bikes cost $270 each to make: $195 in variable costs per bike and $75 of fixed costs per bike. Radar received an offer from a potential customer who wants to buy 300 bikes for $460 each. Incremental fixed costs to make this order are $44,000. No other costs will change if this order is accepted. Compute Radar's additional income (ignore taxes) if it accepts this order. Incremental Incremental Amount per Fixed Unit Costs Incremental Income from New Business Contribution margin Incremental income (loss) from new business The company should 1 QS 25-15 Special offer LO P7 Radar Company sells bikes for $500 each. The company currently sells 4,350 bikes per year and could make as many as 4,650 bikes per year. The bikes cost $270 each to make: $195 in variable costs per bike and $75 of fixed costs per bike. Radar received an offer from a potential customer who wants to buy 300 bikes for $460 each. Incremental fixed costs to make this order are $44,000. No other costs will change if this order is accepted. Compute Radar's additional income (ignore taxes) if it accepts this order. Incremental Incremental Amount per Fixed Unit Costs Incremental Income from New Business Contribution margin Fixed costs Sales Variable cost Income from operations business
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