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Sunland, 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

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Sunland, 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 19,700 Tri-Robos is as follows. Cost Direct materials ($52 per robot) $1,024,400 Direct labor ($40 per robot) 788,000 Variable overhead ($7 per robot) 137,900 Allocated fixed overhead ($30 per robot) 591,000 Total $2,541,300 Sunland is approached by Tienh Inc., which offers to make Tri-Robo for $119 per unit or $2,344,300. Following are independent assumptions.

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