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Radar Company sells bikes for $460 each. The company currently sells 4,100 bikes per year and could make as many as 4,410 bikes per year.
Radar Company sells bikes for $460 each. The company currently sells 4,100 bikes per year and could make as many as 4,410 bikes per year. The bikes cost $225 each to make: $170 in variable costs per bike and $55 of fixed costs per bike. Radar receives an offer from a potential customer who wants to buy 310 bikes for $420 each. Incremental fixed costs to make this order are $100 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 Total Contribution margin Income 0 (b) The company should
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