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QS 23-15 Special offer LO P7 Radar Company sells bikes for $500 each. The company...

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Accounting

QS 23-15 Special offer LO P7

Radar Company sells bikes for $500 each. The company currently sells 4,000 bikes per year and could make as many as 4,340 bikes per year. The bikes cost $280 each to make: $200 in variable costs per bike and $80 of fixed costs per bike. Radar received an offer from a potential customer who wants to buy 340 bikes for $460 each. Incremental fixed costs to make this order are $47,000. No other costs will change if this order is accepted. Compute Radars additional income (ignore taxes) if it accepts this order.

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