Radar Company sells bikes for $490 each. The company currently sells 4,150 bikes per year and...
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Radar Company sells bikes for $490 each. The company currently sells 4,150 bikes per year and could make as many as 4,460 bikes per year. The bikes cost $280 each to make: $175 in variable costs per bike and $105 of fixed costs per bike. Radar receives an offer from a potential customer who wants to buy 310 bikes for $460 each. Incremental fixed costs to make this order are $70 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 (b) The company should Radar Company sells bikes for $490 each. The company currently sells 4,150 bikes per year and could make as many as 4,460 bikes per year. The bikes cost $280 each to make: $175 in variable costs per bike and $105 of fixed costs per bike. Radar receives an offer from a potential customer who wants to buy 310 bikes for $460 each. Incremental fixed costs to make this order are $70 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 (b) The company should
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