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Radar Company sells bikes for $520 each. The company currently sells 4,350 bikes per year and could make as many as 4,730 bikes per
Radar Company sells bikes for $520 each. The company currently sells 4,350 bikes per year and could make as many as 4,730 bikes per year. The bikes cost $245 each to make: $195 in variable costs per bike and $50 of fixed costs per bike. Radar received an offer from a potential customer who wants to buy 380 bikes for $510 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. Sales Variable cost Contribution margin Fixed costs Incremental Amount per Unit Incremental Fixed Costs Incremental Income from New Business $ 510 195 Incremental income (loss) from new business The company should $ 46,000
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