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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 transmit
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 19,800 Tri-Robos is as follows. Cost Direct materials ($51 per robot) $1,009,800 Direct labor (540 per robot) 792,000 Variable overhead (56 per robot) 118,800 Allocated fixed overhead ($30 per robot) 594,000 Total $2,514,600 Jobs is approached by Tienh Inc., which offers to make Tri-Robo for 5116 per unit or $2.296,800 Following are independent assumptions, (1) 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. (451) Net Income Increase Buy (Decrease) Direct materials $ Direct labor Variable overhead Make Fored overhead Purchase price Total annual cost Using incremental analysis, determine whether Jobs should accept this offer The offer
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