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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
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 20,700 Tri-Robos is as follows. Cost Direct materials ($49 per robot) $1,014,300 Direct labor ($42 per robot) 869,400 Variable overhead ($5 per robot) 103,500 Allocated fixed overhead ($29 per robot) 600,300 Total $2,587,500 Jobs is approached by Tienh Inc., which offers to make Tri-Robo for $115 per unit or $2.380,500. Following are independent assumptions. Assume that $405,000 of the fixed overhead cost can be avoided. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg. (45).) Direct materials $ Direct labor Variable overhead Fixed overhead Purchase price Total annual cost $ Make Buy $ Using incremental analysis, determine whether Jobs should accept this offer. The offer ww 5 Net Income Increase (Decrease) $
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