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Radar Company sells bikes for $530 each. The company currently sells 4,150 bikes per year and could make as many as 4,450 bikes per year.
Radar Company sells bikes for $530 each. The company currently sells 4,150 bikes per year and could make as many as 4,450 bikes per year. The bikes cost $270 each to make: $180 in variable costs per bike and $90 of fixed costs per bike. Radar received an offer from a potential customer who wants to buy 300 bikes for $520 each. Incremental fixed costs to make this order are $49,000. No other costs will change if this order is accepted. Compute Radars additional income (ignore taxes) if it accepts this order.
Incremental Incremental Amount per Fixed Unit Costs Incremental Income from New Business Contribution margin Incremental income (loss) from new business The company shouldStep by Step Solution
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