Sheridan, 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 20,700 Tri-Robos is as follows. Cost Direct materials ($49 per robot) $1,014,300 869,400 Direct labor ($42 per robot) Variable overhead ($5 per robot) Allocated fixed overhead ($29 per robot) 103,500 600,300 Total $2,587,500 Sheridan is approached by Tienh Inc., which offers to make Tri-Robo for $115 per unit or $2,380,500. Following are independent assumptions. (a1) Your answer is correct Assume that $405,000 of the fixed overhead cost can be avoided. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net Income Increase (Decrease) Make Buy Direct materials $ 1014300 i $ 1014300 Direct labor 869400 869400 Variable overhead 103500 i 103500 Direct materials 1014300 i $ $ 1014300 Direct labor 869400 i i 869400 Variable overhead 103500 i 103500 Fixed overhead 600300 i 195300 i 405000 Purchase price 1 2380500 i -2380500 F Total annual cost 2587500 i 2575800 $ 11700 Using incremental analysis, determine whether Sheridan should accept this offer. The offer should be accepted eTextbook and Media Attempts: unlimited (a2) Your answer is partially correct. Assume that none of the fixed overhead can be avoided. However, if the robots are purchased from Tienh Inc., Sheridan can use the released productive resources to generate additional income of $375,000. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg. (45).) Net Income Increase (Decrease) Make Buy Direct materials $ $ 1014300 i $ $ 1014300 (a2) Your answer is partially correct. Assume that none of the fixed overhead can be avoided. However, if the robots are purchased from Tienh Inc., Sheridan can use the released productive resources to generate additional income of $375,000. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net Income Increase (Decrease) Make Buy Direct materials $ 1014300 $ $ 1014300 Direct labor 869400 i 869400 Variable overhead 103500 i 103500 Fixed overhead 600300 i 600300 i Opportunity cost 375000 Purchase price 2380500 i -2380906 Totals $ 2962500 $ 2980800 $ Based on the above assumptions, indicate whether the offer should be accepted or rejected? The offer should not be accepted e Textbook and Media View Policies Show Attempt History Current Attempt in Progress Carla Vista Sports Inc. manufactures basketballs for the Women's National Basketball Association (WNBA). For the first 6 months of 2022, the company reported the following operating results while operating at 80% of plant capacity and producing 118.600 units. Amount Sales $4,506,800 3,475,506 Cost of goods sold Selling and administrative expenses 498,060 Net income $533,234 Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $249,000. In July, normally a slack manufacturing month, Carla Vista Sports receives a special order for 10,000 basketballs at $28 each from the Greek Basketball Association (GBA). Acceptance of the order would increase variable selling and administrative expenses $0.73 per unit because of shipping costs but would not increase fixed costs and expenses. (a) & (b) Your answer is correct. (a) Prepare an incremental analysis for the special order. (Round all per unit computations to 2 decimal places, eg. 15.25. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Reject Order Accept Order Net Income Increase (Decrease) Revenues $ i $ 280,000.00 $ 280,000.00 Cost of goods sold 212,100.00 i -212,100.00 Selling and administrative 28,300.00 i -28,300.00 ???? ???? re Order Order (Decrease) Revenues $ $ 280,000.00 $ 280,000.00 Cost of goods sold 212,100.00 -212,100.00 Selling and administrative expenses 28,300.00 -28,300.00 Net income $ $ 39.600.00 $ 39,600.00 (b) Should Carla Vista Sports Inc. accept the special order? Yes e Textbook and Media Attempts: unlimited (c) * Your answer is incorrect. What is the minimum selling price on the special order to produce net income of $5.16 per ball? (Round answer to 2 decimal places, eg. 15.25.) Minimum selling price $ 30.93 e Textbook and Media Save for Later Attempts: unlimited Submit
