Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

!!! View Policies Current Attempt in Progress SY Telc has recently started to manufacture RecRobo, a three-wheeled robot that can scan a home for fires

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
!!! View Policies Current Attempt in Progress SY Telc 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 ($41 per robot) $820,000 Direct labour ($33 per robot) 660,000 Variable overhead ($4 per robot) 80,000 Allocated fixed overhead ($20 per robot) 400,000 Total $1,960,000 SY Telc is approached by Chen Inc., which offers to make RecRobo for $75 per unit or $1,500,000. Using incremental analysis, determine whether SY Telc should accept this offer under each of the following independent assumptions: (1) Assume that $240,000 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, e.g. (15,000)) preceding the number e.g.-15,000 or parenthesis, e.g. (15,000).) Make $ $ $ Should the offer be accepted? $ Buy -/4 E Net Income Increase (Decrease) sume that none of the fixed overhead is avoidable. However, if the robots are purchased from Chen Inc., SY Telc can use the ed productive resources to generate additional income of $140,000. (If an amount reduces the net income then enter with a negative receding the number e.g.-15,000 or parenthesis, e.g. (15,000).) Net Income Increase Make Buy (Decrease) $ Should the offer be accepted? FI Should the offer be accepted? eTextbook and Media A $ $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions