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S 23-20 (Algo) Special offer pricing LO P7 Radar Company sells bikes for $510 each. The company currently sells 4,050 bikes per year and could
S 23-20 (Algo) Special offer pricing LO P7 Radar Company sells bikes for $510 each. The company currently sells 4,050 bikes per year and could make as many as 4,380 bikes per year. The bikes cost $235 each to make: $190 in variable costs per bike and $45 of fixed costs per bike. Radar receives an offer from a potential customer who wants to buy 330 bikes for $490 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? (a) Special offer analysis Sales Variable costs Contribution margin i Foxed costs (incremental) Income (b) The company should Per Unit Total
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