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Pharoah, Inc. has recently started the manufacture of Tri-Robo, a three wheeled robot that can...

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Accounting

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Pharoah, 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 20,600 Tri-Robos is as follows. Cost $1,071,200 824,000 Direct materials ($52 per robot) Direct labor ($40 per robot) Variable overhead ($7 per robot) Allocated fixed overhead ($29 per robot) 144,200 A 597.400 Total $2.636,800 Pharoah is approached by Tienh Inc, which offers to make Tri-Robo for $118 per unit or $2,430,800. Following are independent assumptions Assume that $405,000 of the fixed overhead cost can be avoided. (Enter negative amounts using elther a negative sign preceding the number es. -45 or parentheses eg. (451) Net Income Increase (Decrease) Make Buy Direct materials 1071200 1071200 Direct labor 824000 824000 Variable overhead 144200 144200 Fixed overhead 597400 Purchase price 20600 20600 Total annual cost 2636800 $ Using incremental analysis, determine whether Pharoah should accept this offer. The offer

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