Radar Company sells bikes for $540 each. The company currently sells 4,400 bikes per year...
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Radar Company sells bikes for $540 each. The company currently sells 4,400 bikes per year and could make as many as 4,740 bikes per year. The bikes cost $290 each to make: $155 in variable costs per bike and $135 of fixed costs per bike. Radar receives an offer from a potential customer who wants to buy 340 bikes for $530 each. Incremental fixed costs to make this order are $80 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
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