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Exercise 20-6 Jobs, Inc. has recently started the manufacture of Tri-Robo, a three-wheeled robot that can scan a home for fires and gas leaks and
Exercise 20-6 Jobs, 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 mobile phone. The cost structure to manufacture 20,030 Tri-Robos is as follows. Cost Direct materials ($51 per robot) $1,021,530 Direct labor ($39 per robot) 781,170 Variable overhead ($6 per robot) 120,180 Allocated fixed overhead ($24 per robot ) 480,720 Total $2,403,600 Jobs is approached by Tienh Inc. , which offers to make Tri-Robo for $108 per unit or $2,163,240. Assume that $280,420 of the fixed overhead cost can be reduced (avoided). Prepare incremental analysis. (Enter negative amounts using either a negative sign preceding the number eg-45 or parentheses e.g. (45).) lake Buy Net Income Increase (Decrease ) Direct materials Direct labor Varlable overhead S G Fixed overhead Purchase price Total annual cost $ Determine whether Jobs should accept this offer
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