Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Radar Company sells bikes for $550 each. The company currently sells 4.200 bikes per year and could make as many as 4,590 bikes per year.

image text in transcribed
image text in transcribed
Radar Company sells bikes for $550 each. The company currently sells 4.200 bikes per year and could make as many as 4,590 bikes per year. The bikes cost $260 each to make: $195 in variable costs per bike and $65 of fixed costs per bike. Radar received an offer from a potential customer who wants to buy 390 bikes for $510 each. Incremental fixed costs to make this order are $50,000. No other costs will change if this order is accepted. Compute Radar's 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 Rory Company has a machine with a book value of $105,000 and a remaining five-year useful life. A new machine is available at a cost of $123,000, and Rory can also receive 579,000 for trading in its old machine. The new machine will reduce variable manufacturing costs by $23,500 per year over its five-year useful life. Calculate the Incremental income. (Any losses or outflows should be entered with a minus sign.) Incremental Income From Replacing Machine Incremental income (incremental cost)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting

Authors: Jan R. Williams, Susan F. Haka, Mark S. Bettner, Joseph V. Carcello

12th Edition

0071116796, 978-0071116794

More Books

Students also viewed these Accounting questions

Question

Explain how SIHRM is linked to different global business strategies

Answered: 1 week ago