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The following monthly data are for RadioCom, Inc., a maker of handheld VHF radios. Radio Com produces and sells 5,000 radios each month to
The following monthly data are for RadioCom, Inc., a maker of handheld VHF radios. Radio Com produces and sells 5,000 radios each month to regular customers. Sales revenue Variable costs Contribution margin Fixed costs Profit image Total Monthly Per Unit $100 Data at 5,000 Radios $500,000 60 $40 300,000 $200,000 135,000 $ 65,000 RadioCom received an offer to produce 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. 1. Determine whether RadioCom would be better off rejecting or accepting the offer (show any calculations).
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