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Question #5 Westmount Limited has recently started the manufacture of Trio, a three-wheeled robot that can scan a home for fires and gas leaks and

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Question #5 Westmount Limited has recently started the manufacture of Trio, 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 20,000 Trios is as follows. Cost Direct materials.550 per robot) $1,000.00 o Direct labor($40 per robot 800.000 Variable overhead (36 per robot) 120,000 Allocated fixed overhead ($30 per robot 600 000 $2,520,00 Total 0 Westmount Limited is approached by Tokyo Inc., which offers to make the Trio for $115 per unit or $2,300,000 Required #1 Using incremental analysis, determine if Westmount Limited should accept (yes or no) this offer under the condition that if they did, $405,000 of fixed cost overhead would be avoided and not incurred; or $195,000 fixed overhead will continue to be incurred. Effect on income Make Required #2 Using incremental analysis, determine if Westmount Limited should accept this offer (yes or not) under the condition that if they did, none of the fixed overhead costs could be avoided but if the Trios were purchased from Tokyo, Westmount Limited can use the released productive resources to generate additional income of $375,000 Make Buy Effect Income

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