Question
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 19,900 Tri-Robos is as follows. Cost Direct materials ($49 per robot) $975,100 Direct labor ($39 per robot) 776,100 Variable overhead ($6 per robot) 119,400 Allocated fixed overhead ($30 per robot) 597,000 Total $2,467,600 Jobs is approached by Tienh Inc., which offers to make Tri-Robo for $113 per unit or $2,248,700. 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 e.g. -45 or parentheses e.g. (45).) Make Buy Net Income Increase (Decrease) Direct materials $enter direct materials in dollars $enter direct materials in dollars $enter direct materials in dollars Direct labor enter direct labor in dollars enter direct labor in dollars enter direct labor in dollars Variable overhead enter variable overhead in dollars enter variable overhead in dollars enter variable overhead in dollars Fixed overhead enter fixed overhead in dollars enter fixed overhead in dollars enter fixed overhead in dollars Purchase price enter the purchase price in dollars enter the purchase price in dollars enter the purchase price in dollars Total annual cost $enter total annual cost in dollars $enter total annual cost in dollars $enter total annual cost in dollars Using incremental analysis, determine whether Jobs should accept this offer. The offer select an option.
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