Exercise 21-6 (Part Level Submission) Jobs, Inc. has recently started the manufacture of Tri-Robo, a...
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Exercise 21-6 (Part Level Submission) 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 21,000 Tri-Robos is as follows. Direct materials ($49 per robot) Direct labor ($41 per robot) Variable overhead ($S per robot) Allocated fixed overhead ($29 per robot) Cost $1,029,000 861,000 105,000 600,000 Total Jobs is approached by Tienh Inc., which offers to make Tri-Robo for $113 per unit or $2,373,000 Following are independent assumptions. (a1) 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. -15 or parentheses e.g. (15).) Net Income Increase (Decrease) Make Buy Direct materials Direct labor Variable overhead Fixed overhead Purchase price Total annual cost e Using incremental analysis, determine whethe Jobs should accept this offer The offer
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