question 2

PLUS Wandt, Managerial Accounting, Fifth Canadian Edition PRINTER VERSION 4 BACK NEXT JRCES 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 phony. The cost structure to manufacture 19,900 RecRobos is as follows: Cost Direct materials ($37 per robot) $736,300 Direct labour ($25 per robot) 497,500 Variable overhead ($4 per robot) 79,600 Allocated fixed overhead ($20 per robot) 398,000 Total $1,711,400 Study 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 S Weygande, Managerial Accounting, Fifth Canadian Edition PRINTER VERSION 4 BACK Should the offer be accepted? (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 Should the offer be accepted? LINK TO TEXT