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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 the information to a smartphone. The cost structure to manufacture 20,000 Tri-Robos is as follows.
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 20,000 Tri-Robos is as follows. Direct materials ($50 per robot) Direct labor ($40 per robot) Variable overhead ($6 per robot) Allocated fixed overhead ($30 per robot) Total Cost $1,000,000 800,000 120,000 600,000 $2,520,000 Jobs is approached by Tienh Inc, which offers to make Tri-Robo for $115 per unit or $2,300,000 Following are independent assumptions, (a1) Assume that $405,000 of the fixed overhead cost can be avoided. (Enter negative amounts using either a negative sign preceding the number 0.9. -45 or parentheses eg. (45) Net Income Increase (Decrease) Make Buy Direct materials $ $ 0 $ Direct labor Variable overhead Fixed overhead Purchase price Total annual cost $ Using incremental analysis, determine whether Jobs should accept this offer. The offer should be accepted should not be accepted eTextbook and Media Assistance Used Step by Step Solution
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