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Sweet Acacia has recently started to manufacture RecRobo, a three-wheeled robot that can scan a home for fires and gas leaks and then transmit this
Sweet Acacia 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 20,100 RecRobos is as follows: Sweet Acacia is approached by Clinton Inc., which offers to make RecRobo for $74 per unit or $1,487,400. Using incremental analysis, determine whether Sweet Acacia should accept this offer under each of the following independent assumptions: (1) Assume that $261,300 of the fixed overhead cost is avoidable. (If an amount reduces the net income then enter with a negative sign preceding the number eg. 15,000 or parenthesis, eg. (15,000). While alternate approaches are possible, irrelevant fixed costs should be Should the offer be accepted? (2) Assume that none of the fixed overhead is avoidable. However, if the robots are purchased from Clinton Inic, Sweet Aracia can use the released productive resources to generate additional incorne of $161,300. (If an amount reduces the net income then enter with a negative stgn precedirg the numlyer eg-15,000 or parenthesis, eg. (15,000). While altemate opprooches are possible, irrelevant foed costs should be included in both options when solving this
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