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Radar Company sells bikes for $480 each. The company currently sells 3,900 bikes per year and could make as many as 5,000 bikes per year.
Radar Company sells bikes for $480 each. The company currently sells 3,900 bikes per year and could make as many as 5,000 bikes per year. The bikes cost $280 each to make: $165 in variable costs per bike and $115 of fixed costs per bike. Radar received an offer from a potential customer who wants to buy 900 bikes for $440 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.
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