Radar Company sells bikes for $460 each. The company currently sells 4,350 bikes per year and could make as many as 4,75

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Radar Company sells bikes for $460 each. The company currentlysells 4,350 bikes per year and could make as many as 4,750 bikesper year. The bikes cost $245 each to make: $175 in variable costsper bike and $70 of fixed costs per bike. Radar receives an offerfrom a potential customer who wants to buy 400 bikes for $430 each.Incremental fixed costs to make this order are $90 per bike. Noother costs will change if this order is accepted.(a) Compute the income for the specialoffer.(b) Should Radar accept this offer?

Radar Company Sells Bikes For 460 Each The Company Currently Sells 4 350 Bikes Per Year And Could Make As Many As 4 75 1 (34.71 KiB) Viewed 11 times

Rory Company has an old machine with a book value of $81,000 and a remaining five-year useful life. Rory is considering purchasing a new machine at a price of $107,000. Rory can sell its old machine now for $80,000. The old machine has variable manufacturing costs of $37,000 per year. The new machine will reduce variable manufacturing costs by $14,800 per year over its five-year useful life. (a) Prepare a keep or replace analysis of income effects for the machines. (b) Should the old machine be replaced? Complete this question by entering your answers in the tabs below. Required A Required B Prepare a keep or replace analysis of income effects for the machines. Keep or Replace Analysis Revenues Sale of existing machine Costs Purchase of new machine Variable manufacturing costs Income (loss) Keep 0 $ 80,000 $ $ 185,000 $ (185,000) 0 Replace Required A 107,000 111,000 Income Increase (Decrease) if replaced Required B >