Maurice Tutor

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Education

  • MCS,PHD
    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

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  • Professor
    Phoniex University
    Oct-2001 - Nov-2016

Category > Accounting Posted 17 Aug 2017 My Price 11.00

Jobs, Inc

E7-6 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 mobile phone. The cost structure to manufacture 20,000 Tri-Robos is as follows.

Cost

Direct materials ($50 per robot)

$1,000,000

Direct labor ($40 per robot)

800,000

Variable overhead ($6 per robot)

120,000

Allocated fixed overhead ($30 per robot)

600,000

Total

$2,520,000

 

Jobs is approached by Tienh Inc., which offers to make Tri-Robo for $115 per unit   or

$2,300,000.

Instructions

(a)   Using incremental analysis, determine whether Jobs should accept this offer under each of the following independent assumptions.

(1)  Assume that $405,000 of the fixed overhead cost can be reduced (avoided).

(2)  Assume that none of the fixed overhead can be reduced (avoided). However, if the robots are purchased from Tienh Inc., Jobs can use the released productive resources to generate additional income of $405,000.

(b)   Describe the qualitative factors that might affect the decision to purchase the robots from an outside supplier.

Answers

Maurice Tutor
(5)
Status NEW Posted 17 Aug 2017 06:08 PM My Price 11.00

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