Blossom, Inc. has recently started the manufacture of Tri-Robo, a three-wheeled robot that can scan a...
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Blossom, Inc. has recently started the manufacture of Tri-Robo, a three-wheeled robot that can scan a home for fires and gas leaks and then transmit this information to a smartphone. The cost structure to manufacture 20,100 Tri-Robos is as follows. Cost Direct materials ($51 per robot) $1,025,100 Direct labor ($40 per robot) 804,000 Variable overhead ($6 per robot) 120,600 Allocated fixed overhead ($30 per robot) 603,000 Total $2,552,700 Blossom is approached by Tienh Inc., which offers to make Tri-Robo for $116 per unit or $2,331,600. Following are independent assumptions. (a1) Assume that $405,000 of the fixed overhead cost can be avoided. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Direct materials Direct labor Variable overhead Fixed overhead Purchase price +A Total annual cost $ Make SA Net Income Buy Increase (Decrease) $ Using incremental analysis, determine whether Blossom should accept this offer. The offer Blossom, Inc. has recently started the manufacture of Tri-Robo, a three-wheeled robot that can scan a home for fires and gas leaks and then transmit this information to a smartphone. The cost structure to manufacture 20,100 Tri-Robos is as follows. Cost Direct materials ($51 per robot) $1,025,100 Direct labor ($40 per robot) 804,000 Variable overhead ($6 per robot) 120,600 Allocated fixed overhead ($30 per robot) 603,000 Total $2,552,700 Blossom is approached by Tienh Inc., which offers to make Tri-Robo for $116 per unit or $2,331,600. Following are independent assumptions. (a1) Assume that $405,000 of the fixed overhead cost can be avoided. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Direct materials Direct labor Variable overhead Fixed overhead Purchase price +A Total annual cost $ Make SA Net Income Buy Increase (Decrease) $ Using incremental analysis, determine whether Blossom should accept this offer. The offer
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