Decision to accept additional business
Radar Company sells bikes for $490 each. The company currently sells 4,600 bikes per year and could make as many as 5,000 bikes per year. The bikes cost $265 each to make; $160 in variable costs per bike and $105 of fixed costs per bike. Radar received an offer from a potential customer who wants to buy 800 bikes for $360 each. Increment fixed costs to make this order are $57,000. No other will change if this order is accepted.
Compute Radar's additional income (ignore taxes) if it accepts this order.