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Question 10 of 13 1.68 / 8 ili View Policies Show Attempt History Current...

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Accounting

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Question 10 of 13 1.68 / 8 ili View Policies Show Attempt History Current Attempt in Progress 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 19,800 Tri-Robos is as follows. Cost Direct materials ($51 per robot) $1,009,800 Direct labor ($40 per robot) 792,000 Variable overhead ($6 per robot) 118,800 Allocated fixed overhead ($30 per robot) 594,000 Total $2,514,600 Jobs is approached by Tienh Inc., which offers to make Tri-Robo for $116 per unit or $2,296,800. 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 Make Buy (Decrease) Direct materials $ 1009800 i $ i $ -2296800 Direct labor 792000 i i 1009800 Variable 11800 i 792000 overhead Fixed overhead 405000 405000 Purchase price Total annual cost $ 2325600 $ 2296800 $ 28800 Using incremental analysis, determine whether Jobs should accept this offer

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