Question 3 of 5 View Policies 3/6 iii Show Attempt History Current Attempt in Progress Ivanhoe, 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 20,400 Tri-Robos is as follows. Cost Direct materials ($ 51 per robot) $ 1,040,400 Direct labor ($ 39 per robot) 795,600 Variable overhead ($ 7 per robot) 142,800 Allocated fixed overhead ($ 29 per robot) 591,600 Total $ 2,570,400 Ivanhoe is approached by Tienh Inc., which offers to make Tri-Robo for $ 116 per unit or $ 2,366,400. Following are independent assumptions. 6:39 PM Question 3 of 5 (a1) 376 mi Your answer is correct. 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).) Make Net Income Increase (Decrease) Buy Direct materials $ 1040400 $ $ 1040400 Direct labor 795600 795600 Variable overhead 142800 142800 Fixed overhead 591600 186600 405000 Purchase price 3 2366400 2366400 $ 2570400 2553000 Total annual cost $ $ 17400 Reading list Question 3 of 5 Purchase price 376 2366400 Total annual cost -2366400 $ 2570400 2553000 $ 17400 Using incremental analysis, determine whether Ivanhoe should accept this offer. The offer should be accepted e Textbook and Media Attempts: 3 of 5 used (a2) Assume that none of the fixed overhead can be avoided. However, if the robots are purchased from Tienh Inc., Ivanhoe can use the released productive resources to generate additional income of $ 375,000. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses eg. (45).) Net Income Question 3 of 5 preceding the number eg. 45 or parentheses e.g. (45).) 3/6 5 Make Net Income Increase (Decrease) Buy Direct materials $ $ $ Direct labor Variable overhead Fixed overhead Opportunity cost Purchase price Totals $ $ Based on the above assumptions, indicate whether the offer should be accepted or rejected? B Reading list Question 3 of 5 3/6 iii Fixed overhead Opportunity cost Purchase price Totals $ $ $ Based on the above assumptions, indicate whether the offer should be accepted or rejected? The offer e Textbook and Media Save for later Attempts: 0 of 5 used Submit Answer 6:40 PM