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Sunland 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
Sunland 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 20,000 RecRobos is as follows: Direct materials ($37 per robot) Direct labour ($29 per robot) Variable overhead ($4 per robot) Allocated fixed overhead ($23 per robot) Total Cost $740,000 580,000 --dinthe 80,000 460,000 $1,860,000 Sunland is approached by Sipacore Inc., which offers to make RecRobo for $70 per unit or $1,400,000. Using incremental analysis, determine whether Sunland should accept this offer under each of the following independent assumptions: (1) Assume that $300,000 of the fixed overhead cost is avoidable. (If an amount reduces the net income then enter with a negative sign 15.000-thonic 1150001 14/hilltowaaks monsible imaland fore
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