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A company sells bikes for $600 each. The company currently sells 7,500 bikes per year...

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Accounting

A company sells bikes for $600 each. The company currently sells 7,500 bikes per year and could make as many as 10,000 bikes per year. The bikes cost $450 each to make: $300 in variable costs per bike and $150 of fixed costs per bike. The company receives an offer from a potential customer who wants to buy 1,500 bikes for $500 each. Incremental fixed costs to make this order are $120 per bike. No other costs will change if this order is accepted. Income for the special offer is:

Group of answer choices

$300,000

$270,000

$120,000

$(105,000)

Answer & Explanation Solved by verified expert
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