26. Special Order Decision: Operating with Idle Capacity. The following monthly financial data are for RadioCom, Inc., a maker of handheld VHF radios. RadioCom produces and sells 5,000 radios each month to regular customers. Total Monthly Data at Per Unit 5,000 Radios Sales revenue $100 $500,000 Variable costs 60 300,000 Contribution margin $ 40 $200,000 Fixed costs 135,000 Profit $ 65,000 RadioCom received an offer from the Coast Guard Auxiliary to purchase 1,000 radios next month for $75 per unit. RadioCom can produce up to 7,000 radios a month, so the special order would not affect regular customer sales. Variable costs per radio will remain at $60. This special order will have no effect on monthly fixed costs. Required: 1. Using the differential analysis format presented in Figure 4.12 "Special Order Differential Analysis for Tony's T-Shirts", determine whether RadioCom would be better off rejecting the special order (Alternative 1) or accepting the special order (Alternative 2). 2. Summarize the result of accepting the special order using the format presented in Figure 4.13 "Summary of Differential Analysis for Tony's T-Shirts". 27. Special Order Decision: Operating at Full Capacity. The following monthly financial data are for RadioCom, Inc., a maker of handheld VHF radios. RadioCom produces and sells 5,000 radios each month to regular customers. Total Monthly Data at Per Unit 5,000 Radios Sales revenue $100 $500,000 Variable costs 60 300,000 Contribution margin $ 40 $200,000 Fixed costs 135,000 Profit $ 65,000 RadioCom received an offer from the Coast Guard Auxiliary to purchase 1,000 radios next month for $75 per unit. RadioCom can only produce up to 5,000 radios month, so the special order would result in reduced sales to regular customers. Variable costs per radio will remain at $60. This special order will have no effect on monthly fixed costs.RadioCom received an offer from the Coast Guard Auxiliary to purchase 1,000 radios next month for $75 per unit. RadioCom can only produce up to 5,000 radios a month, so the special order would result in reduced sales to regular customers. Variable costs per radio will remain at $60. This special order will have no effect on monthly fixed costs. Required: 1. Using the differential analysis format presented in Figure 4.12 "Special Order Differential Analysis for Tony's T-Shirts", determine whether RadioCom would be better off rejecting (Alternative 1) or accepting (Alternative 2) the offer received from the Coast Guard Auxiliary. 2. Summarize the result of accepting the special order using the format presented in Figure 4.13 "Summary of Differential Analysis for Tony's T-Shirts".28. Target Costing. Quality Sounds, Inc., makes speakers and headphones for high-end sound systems. The marketing department has ldenb'ed a market for a specic type of head phones that Quality Sounds does not currently produce, and expects to be able to sell each pair for $150. Management requires a prot of 45 percent of the selling price. Required: Determine the highest post (target cost) management would be willing to accept to produce this product