80.2K

Verified Solution

Link Copied!

Exercise 7-6 al-a2 (Part Level Submission) (Video) Jobs, 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 19,100 Tri-Robos is as follows. Cost Direct materials ($51 per robot) Direct labor ($41 per robot) Variable overhead ($5 per robot) Allocated fixed overhead ($31 per robot) Total $974,100 783,100 95,500 592,100 $2,444,800 Jobs is approached by Tienh Inc., which offers to make Tri-Robo for $117 per unit or $2,234,700. Following are independent assumptions. 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 974100 974100 Direct labor 783100 783100 Variable overhead 95500 0 95500 v Fixed overhead 592100 187100 405000 M Purchase price 2234700 -2234700 1 Total annual cost 2444800 2421800 23000 Assume that none of the fixed overhead can be avoided. However, if the robots are purchased from Tienh Inc., Jobs 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 $ $ Direct labor Variable overhead Fixed overhead Opportunity cost Purchase price Totals

Answer & Explanation Solved by verified expert

See Answer