Radar Company sells bikes for $300 each. The company currently sells 3,750 bikes per year and could make as many as 5,000 bikes per year. The bikes cost $225 each to make: $150 in variable costs per bike and $75 of fixed costs per bike. Radar received an offer from a potential customer who wants to buy 750 bikes for $250 each. Incremental fixed costs make this order are $50,000. No other costs will change if this order is accepted.

Compute Radar's additional income (ignore taxes) if it accepts this order.

	Incremental Amount per Unit	Incremental Fixed Costs	Incremental Income from New Business
Sales	$250		$187,500
Variable cost	(150)		(112,500)
Contribution margin	$100		$75,000
Fixed costs		???	???
Incremental income (loss) from new business			???
The company should			Accept the order