Radar Company sells bikes for $500 each. The company currently sells 4,200 bikes per year and could make as many as 4,550 bikesper year. The bikes cost $270 each to make: $160 in variable costs per bike and $110 of fixed costs per bike. Radar receives an offerfrom a potential customer who wants to buy 350 bikes for $490 each. Incremental fixed costs to make this order are $70 per bike. Noother 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 analysisContribution marginIncome(b) The company shouldPer UnitTotal

Incremental analysis :— It is one of the analysis which shows the comparison between two different…

Answered: Radar Company sells bikes for $500…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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yntech makes digital cameras for drones. Their basic digital camera uses $80 in variable costs and requires $1,600 per month in fixed costs. Syntech sells 100 cameras per month. If they process the camera further to enhance its functionality, it will require an additional $50 per unit of variable costs, plus an increase in fixed costs of $1,200 per month. The current price of the camera is $170. The marketing manager is positive that they can sell more and charge a higher price for the improved version. At what price level would the upgraded camera begin to improve operational earnings?
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Can you help with the CVP Drill #6?
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