Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Radar Company sells bikes for $ 4 7 0 each. The company currently sells 3 , 5 0 0 bikes per year and could make

Radar Company sells bikes for $470 each. The company currently sells 3,500 bikes per year and could make as many as 5,000 bikes per year. The bikes cost $265 each to make: $180 in variable costs per bike and $85 of fixed costs per bike. Radar received an offer from a potential customer who wants to buy 1,000 bikes for $430 each. Incremental fixed costs to make this order are $48,000. No other costs will change if this order is accepted.
Compute Radar's additional income (ignore taxes) if it accepts this order.
\table[[,\table[[Incremental],[Amount per],[Unit]],\table[[Incremental],[Fixed],[Costs]],\table[[Incremental],[Income from New],[Business]]],[Sales,430,,430,000],[Variable cost,180,,18,000],[Contribution margin,250,,412,000],[Fixed costs,,$,48,000,(12,400)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Implementing Database Security And Auditing

Authors: Ron Ben Natan

1st Edition

1555583342, 9781555583347

More Books

Students also viewed these Accounting questions