QS 23-20 (Static) Special offer pricing LO P7 Radar Company sells bikes for $300 each. The company currently sells 3,750

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Qs 23 20 Static Special Offer Pricing Lo P7 Radar Company Sells Bikes For 300 Each The Company Currently Sells 3 750 1 (26.24 KiB) Viewed 70 times

QS 23-20 (Static) Special offer pricing LO P7 Radar Company sells bikes for $300 each. The company currently sells 3,750 bikes per year and could make as many as 5,000 bikes per year. The bikes cost $225 each to make: $150 in variable costs per bike and $75 of fixed costs per bike. Radar receives an offer from a potential customer who wants to buy 750 bikes for $250 each. Incremental fixed costs to make this order are $60 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? (a) Special offer analysis Contribution margin Income (b) The company should $ Per Unit Total