Question:

1- need answer for make, buy and net income increase/ decrease

2- need answer for make, buy, net income increase/ decrease

IS Wegant Managerial Accounting, Fifth Canadian Edition PRINTER VERSION BACK NEXT Exercise 7.21 a SY Telc has recently started to manufacture RecRobo, a three-wheeled robot that can scan a home for fires and gas leaks and then transmit this information to a mobile phone. The cost structure to manufacture 19,900 RecRobos is as follows: Direct materials ($37 per robot) Direct labour ($25 per robot) Variable overhead ($4 per robot) Allocated fixed overhead ($20 per robot) Total Cost $736,300 497,500 79,600 398,000 $1,711,400 SY Telc is approached by Chen Inc., which offers to make RecRobo for $63 per unit or $1,253,700. Using incremental analysis, determine whether SY Telc should accept this offer under each of the following independent assumptions: (1) Assume that $238,800 of the fixed overhead cost is avoidable. (If an amount reduces the net income then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000).) Net Income Increase (Decrease) Make Buy Direct materials Direct labour Variable overhead Fixed overhead Purchase price Total annual cost JS Wandt, Managerial Accounting, Fifth Canadian Edition PRINTER VERSION 4 BACK NEXT Should the orrer be accepter Yes y (2) Assume that none of the fixed overhead is avoidable. However, if the robots are purchased from Chen Inc., SY Telc can use the released productive resources to generate additional income of $138,800. (If an amount reduces the net income then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000).) Net Income Increase (Decrease) Make Buy Direct materials Direct labour V Variable overhead Fixed overhead Purchase price V Opportunity cost Total annual cost v Should the offer be accepted? Yes LINK TO TEXT