PROBLEM A-8 Target Costing [L03] National Restaurant Supply, Inc., sells restaurant equipment and supplies throughout most o United States. Management is considering adding a machine that makes cream making machines. Management will negotiate the price of the sorbet machine with its Swedish manufacturer f t he sorbet to its line of ice Management of National Restaurant Supply believes the sorbet machine can be sold to its customers in the United States for $4,950. At that price, annual sales of the sorbet machine should be 100 units. If the sorbet machine is added to National Restaurant Supply's product lines, the company will have to invest $600,000 in inventories and special warehouse fixtures. The variable cost of selling the sorbet machines would be $650 per machine. Required: I. If National Restaurant Supply requires a 15% return on investment (ROI. what is the maxi- mum amount the company would be willing to pay the Swedish manufacturer for the sorbet machines? The manager who is flying to Sweden te negotiate the purchase price of the machines would like to know how the purchase price of the machines would affect National Restaurant Sup- ply's ROI. Construct a chart that shows National Restaurant Supply's ROI as a function of the purchase price of the sorbet machine. Pu ROI on the Y-axis. Plot the ROI for purchase prices between $3,000 and $4, After many hours of negotiations, management has concluded that the Swedish manufactins unwilling to sell the sorbet machine at a low enough price so that National Restaurant Suoplu is able to earn its 15% required ROI Apart from simply giving up on the idea of adding the sorbet machine to National Restaurant Supply's product lines, what could management do? 2. t the purchase price on the X-axis and the resulting 000 per machine. is 3