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Radar Company sells bikes for $530 each. The company currently sells 4,350 bikes per year and could make as many as 4,730 bikes per year.

Radar Company sells bikes for $530 each. The company currently sells 4,350 bikes per year and could make as many as 4,730 bikes per year. The bikes cost $275 each to make: $190 in variable costs per bike and $85 of fixed costs per bike. Radar received an offer from a potential customer who wants to buy 380 bikes for $500 each. Incremental fixed costs to make this order are $45,000. No other costs will change if this order is accepted. Compute Radars additional income (ignore taxes) if it accepts this order.

Incremental Amount per Unit Incremental Fixed Costs Incremental Income from New Business
Contribution margin
Incremental income (loss) from new business
The company should

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