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

Radar Company sells bikes for $550 each. The company currently sells 4,500 bikes per year and could make as many as 4,810 bikes per year. The bikes cost $235 each to make: $185 in variable costs per bike and $50 of fixed costs per bike. Radar receives an offer from a potential customer who wants to buy 310 bikes for $510 each. Incremental fixed costs to make this order are $90 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?
\table[[(a) Special offer analysis,Per Unit,Total],[Sales,510,],[Variable costs],[Contribution margin],[Fixed costs (incremental),90,],[Income,90,],[(b) The company should,Accept special offer]]
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