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Exercise 21-6 (Part Level Submission) Jobs, Inc. has recently started the manufacture of Tri-Robo, a three-wheeled robot that can scan a home for fires and
Exercise 21-6 (Part Level Submission) 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 smartphone. The cost structure to manufacture 20,800 Tri-Robos is as follows Direct materials ($50 per robot) Direct labor ($40 per robot) Variable overhead ($6 per robot) Allocated fixed overhead ($29 per robot) Cost $1,040,000 832,000 124,800 600,000 $2,596,800 Total Jobs is approached by Tienh Inc., which offers to make Tri-Robo for $115 per unit or $2,392,000 Following are independent assumptions (a1) Your answer is correct. Assume that 405,000 of the fixed overhead cost can be avoided. (Enter negative amounts using either a negative sign preceding the number eg -15 or parentheses e.g. (15).) Net Income Increase (Decrease) Make Buy Direct materials 1,040,000 832,000 124,800 600,000 0 2,596,800 0 Direct labor Variable overhead Fixed overhead Purchase price 1,040,000 832,000 124,800 405,000 2,392,000 9,800 195,000 2,392,000 2,587,000 Total annual cost Using incremental analysis, determine whether Jobs should accept this offer
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