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Tamarisk 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
Tamarisk 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. Cost Direct materials ($37 per robot) $740,000 Direct labour ($27 per robot) 540,000 Variable overhead ($6 per robot) 120,000 Allocated fixed overhead ($26 per robot) 520,000 Total $1.920,000 Tamarisk is approached by Oak Inc., which offers to make RecRobo for $71 per unit or $1,420,000. Using incremental analysis, determine whether Tamarisk should accept this offer under each of the following independent assumptions: (1) Assume that $320,000
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