Question 4 of 4 3/6 View Policies Show Attempt History Current Attempt in Progress Oriole, 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 19,400 Tri-Robos is as follows. Direct materials ($49 per robot) Direct labor ($37 per robot) Variable overhead ($6 per robot) Allocated fixed overhead ($31 per robot) Total Cost $950,600 717,800 116,400 601,400 $2,386,200 Oriole is approached by Tienh Inc., which offers to make Tri-Robo for $112 per unit or $2,172,800. Following are independent assumptions. (21) 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 Buy Net Income Increase (Decrease) 950600 $ 950600 $ 0 $ 717800 0 717800 Direct materials Direct labor Variable overhead Fixed overhead 116400 0 116400 601400 196400 405000 Purchase price 0 2172800 (2172800) Total annual cost $ 2386200 2369200 $ 17000 (a2) Assume that none of the fixed overhead can be avoided. However, if the robots are purchased from Tienh Inc., Oriole 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 eg. (45).) Net Income Increase (Decrease) Make 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? The offer e Textbook and Media Save for Later Attempts: 0 of 3 used Submit