Radar Company sells bikes for $ 300 each. The company currently sells 3,750 bikes per year and could make as many as 5,000 bikes per year. The bikes cost $ 225 each to make; $ 150 in variable costs per bike and $ 75 of fixed costs per bike. Radar received an offer from a potential customer who wants to buy 750 bikes for $ 250 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.

  • CreatedNovember 29, 2013
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