Radar Company sells bikes for $520 each. The company currently sells 4,350 bikes per year and could make as many as 4,690bikes per year. The bikes cost $270 each to make: $160 in variable costs per bike and $110 of fixed costs per bike. Radar receivesan offer from a potential customer who wants to buy 340 bikes for $500 each. Incremental fixed costs to make this order are $70per 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 analysisContribution marginIncome:(b) The company shouldPer Unit0Total

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

Answered: Radar Company sells bikes for $520…

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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Fish Finder Company manufactures sonars for fishing boats. Model 100 sells for $400. They produce and sell 6,000 units per year. Cost data are as follows: $25 $65 $15 $280,000 An offer has come in for a one-time sale of 300 units at a special price of $130 per unit. The marketing manager says. that the sale will not affect the company's regular sales activities, and that it will not require any variable selling and administrative costs. The production manager says that there is plenty of excess capacity and the sale will not impact fixed costs in any way. What is the effect this deal on operating income? Direct Materials Direct Labor Variable manufacturing overhead Fixed manufacturing overhead increases by $7,500 increases by $2,100 O increases by $400 decreases by $7,500 per unit per unit per unit per year
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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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Please help me. Fast solution please. Thankyou.
HASF Furniture Inc. manufactures a moderate-price set of lawn furniture (a table and four chairs) that it sells for $500. It currently manufactures and sells 10,000 sets per year. The manufacturing costs 325 (include $185 for materials and $45 for labor per set). The overhead entirely of fixed costs. Modern furniture’s is considering a special purchase offer from a large retail firm, which has offered to buy 300 sets per year for three years at a price of $250 per set. Modern furniture has the available plant capacity to produce the order and expects no other orders or profitable alternative uses of the plant capacity. Required: Revenue increase after accepting the order Cost increase after accepting the order At what amount of profit increaes after accepting the speical order
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