Radar Company sells bikes for $470 each. The company currently sells 4,200 bikes per year and...

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Radar Company sells bikes for $470 each. The company currently sells 4,200 bikes per year and could make as many as 4,580 bikes per year. The bikes cost $255 each to make: $195 in variable costs per bike and $60 of fixed costs per bike. Radar receives an offer from a potential customer who wants to buy 380 bikes for $430 each. Incremental fixed costs to make this order are $100 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? Radar Company sells bikes for $470 each. The company currently sells 4,200 bikes per year and could make as many as 4,580 bikes per year. The bikes cost $255 each to make: $195 in variable costs per bike and $60 of fixed costs per bike. Radar receives an offer from a potential customer who wants to buy 380 bikes for $430 each. Incremental fixed costs to make this order are $100 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?

Answer rating: 100% (QA)

Introduction The special offer can be accepted if it provides extra pr... View the full answer