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Radar Company sells bikes for $460 each. The company currently sells 4,300 bikes per year and could make as many as 4,620 bike per year.
Radar Company sells bikes for $460 each. The company currently sells 4,300 bikes per year and could make as many as 4,620 bike per year. The bikes cost $280 each to make: $175 in variable costs per bike and $105 of fixed costs per bike. Radar received an offer from a potential customer who wants to buy 320 bikes for $430 each. Incremental fixed costs to make this order are $46,000. No other costs will change if this order is accepted. Compute Radar's additional income (ignore taxes) if it accepts this order. Kando Company incurs a $10.00 per unit cost for Product A, which it currently manufactures and sells for $13.50 per unit. Instead of manufacturing and selling this product, the company can purchase it for $6.00 per unit and sell it for $10.30 per unit. If it does so, unit sales would remain unchanged and $6.00 of the $10.00 per unit costs of Product A would be eliminated. 1. Prepare incremental cost analysis. Should the company continue to manufacture Product A or purchase it for resale? (Round your answers to 2 decimal places.) Signal mistakenly produced 1,475 defective cell phones. The phones cost $67 each to produce. A salvage company will buy the defective phones as they are for $31 each. It would cost Signal $90 per phone to rework the phones. If the phones are reworked, Signal could sell them for $146 each. Signal has excess capacity. Should Signal scrap or rework the phones
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