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Compute radar additional income

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Reference no: EM133015725

Question - Radar Company sells bikes for $400 each. The company currently sells 3,950 bikes per year and could make as many as 5,000 bikes per year. The bikes cost $270 each to make: $195 in variable costs per bike and $75 of fixed costs per bike. Radar received an offer from a potential customer who wants to buy 550 bikes for $340 each. Incremental fixed costs to make this order are $48,000. Noother costs will change if this order is accepted. Compute Radar's additional income (ignore taxes) if it accepts this order.

Reference no: EM133015725

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