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Compute radar''s additional income

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Reference no: EM131163972

Decision to accept additional business

Radar Company sells bikes for $490 each. The company currently sells 4,600 bikes per year and could make as many as 5,000 bikes per year. The bikes cost $265 each to make; $160 in variable costs per bike and $105 of fixed costs per bike. Radar received an offer from a potential customer who wants to buy 800 bikes for $360 each. Increment fixed costs to make this order are $57,000. No other will change if this order is accepted.

Compute Radar's additional income (ignore taxes) if it accepts this order.

Reference no: EM131163972

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