Radar Company sells bikes for $460 each. The company currently sells 4,350 bikes per year and...

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Radar Company sells bikes for $460 each. The company currently sells 4,350 bikes per year and could make as many as 4,720 bikes per year. The bikes cost $250 each to make: $180 in variable costs per bike and $70 of fixed costs per bike. Radar receives an offer from a potential customer who wants to buy 370 bikes for $430 each. Incremental fixed costs to make this order are $90 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 Per Unit Total Sales Variable costs Contribution margin Fixed costs (incremental) Income 430 $ 159,100 180 0 (b) The company should Accept special offer Radar Company sells bikes for $460 each. The company currently sells 4,350 bikes per year and could make as many as 4,720 bikes per year. The bikes cost $250 each to make: $180 in variable costs per bike and $70 of fixed costs per bike. Radar receives an offer from a potential customer who wants to buy 370 bikes for $430 each. Incremental fixed costs to make this order are $90 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 Per Unit Total Sales Variable costs Contribution margin Fixed costs (incremental) Income 430 $ 159,100 180 0 (b) The company should Accept special offer

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a Special offer analysis Sales price per bike 430 Total sales revenue fo... View the full answer