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Radar Company sells bikes for $500 each. The company currently sells 4150 bikes per year and could make as many as 4.460 bikes per year.

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Radar Company sells bikes for $500 each. The company currently sells 4150 bikes per year and could make as many as 4.460 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 $470 each. Incremental fixed costs to make this order are $80 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? Answer is not complete. (a) Special offer analysis Per Unit Total Sales $ 470 $ 145.700 Variable costs 170 52,700 Contribution margin S 300 93,000 Fixed costs (incremental) 80 Income 220 $ 92,920 (b) The company should Accept special offer

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