National Restaurant Supply Inc (A)

National R aurant Supply, Inc., sells restaurant equipment and supplies throughout most of the United Stat Management is considering adding a machine that makes sorbet to its line of ice cream making machines. Management will negotiate the price of the sorbet machine with its Swedish manufacturer. Management of National Restaurant Supply believes the sorbet machine can be sold to its customers in the United States for $3,835. At that price, annual sales of the sorbet machine should be 84 units. If the sorbet machine is added to National Restaurant Supply's product lines, the company will have to invest $51,000 in inventories and special warehouse fixtures. The variable cost of selling the sorbet machines would be $350 per machine. Required: 1. if National Restaurant Supply requires a 24% return on investment (RO), what is the maximum amount the company would be willing to pay the Swedish manufacturer for the sorbet machines? Target cost per machine Less National Restaurant Supply's variable selling cost per machine Maximum allowable purchase price per machine