Question
Jobs Inc. has recently started the manufacture of Tri-Robo, a three wheeled robot that can scan a home for fires and as leaks and then
Jobs Inc. has recently started the manufacture of Tri-Robo, a three wheeled robot that can scan a home for fires and as leaks and then transmit the information to a smartphone. The cost structure to manufacture 20,000 Tri-Robos is as follows: dIRECT MATERIALS $50 per robot - Cost $100000, Direct Labor $40 per robot - 800,000, Variable overhead $6 per robot 120,000, Allocated fixed overhead $30 per robot 600,000. Jobs is approached by Tieh Inc. which offers to ake Tri-Robo for $115 per unit or $2,300,000. a. Using incremental analysis, determine whether Jobs should accept this offer undr each of the following Independent asumptions. 1. Asume that $405,000 of the fixed overhead cost can be avoided. 2. Assume that none of the fixed overhead can be avoided. However, if the robots are purchased from Tienh Inc;, Jobs can use the released productive resources to generate additional income of $375,000. b. Describe the qualitative factors that might affect the decision to purchase the robots from an outside supplier.
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