A sunk cost will change with a future course of action False Explanation No

A sunk cost will change with a future course of

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5.A sunk cost will change with a future course of action. Explanation: No further explanation details are available for this problem. Worksheet Difficulty: 1 Easy Learning Objective: 25­C1 Describe the importance of relevant costs for short­term decisions. eBook & Resources References
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16.Award: 10.00 pointsProblems? Adjust creditfor all students.Radar Company sells bikes for $300 each. The company currently sells 3,750 bikes per year and couldmake as many as 5,000 bikes per year. The bikes cost $225 each to make; $150 in variable costs per bikeand $75 of fixed costs per bike. Radar received an offer from a potential customer who wants to buy 750bikes for $250 each. Incremental fixed costs to make this order are $50,000. No other costs will change ifthis order is accepted.Compute Radar’s additional income (ignore taxes) if it accepts this order.$$$$$IncrementalAmount perUnitIncrementalFixed CostsIncremental Incomefrom New BusinessSales250187,500Variable cost150112,500Contribution margin10075,000Fixed costs50,00050,000Incremental income (loss) from new business25,000The company shouldAccept the order Expanded table Difficulty: 2 Medium Learning Objective: 25­A1 Evaluate short­term managerial decisions using relevant costs.
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