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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 20,000 Tri-Robos is as follows. Cost $1,000,000 Direct materials ($50 per robot) Direct labor ($40 per robot) 800.000 Variable overhead ($6 per robot) 120,000 Allocated fixed overhead ($30 per robot) 600,000 Total $2,520,000 Jobs is approached by Tien in which offers to make T-Robo for $115 per unit or $2.300.000 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). Net Income Increase (Decrease) Make Direct materials Direct labor Variable overhead Fixed overhead Purchase price Total annual cost 2.495,000 Using incremental analysis, determine whether Jobs should accept this offer. 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. (Enter negative amounts using either a negative sign preceding the number eg, -45 or parentheses es (45).) Net Income Increase (Decrease) Make Buy 1,000,000 Direct materials 800,000 Direct labor 120,000 Variable overhead Fixed overhead Opportunity cost 200 000 Purchase price Totals
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