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Elementary,Middle School,High School,College,University,PHD
| Teaching Since: | May 2017 |
| Last Sign in: | 402 Weeks Ago, 3 Days Ago |
| Questions Answered: | 66690 |
| Tutorials Posted: | 66688 |
MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
SY Telc has recently started the manufacture of RecRobo, 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 RecRobo’s is as follows. Cost Direct materials ($40 per robot) $800,000 Direct labor ($30 per robot) 600,000 Variable overhead ($6 per robot) 120,000 Allocated fixed overhead ($25 per robot) 500,000 Total $2,020,000 SY Telc is approached by Chen Inc. which offers make RecRobo for $90 per unit or $1,800,000. Instructions (a) Using incremental analysis, determine whether SY Telc should accept this offer under each of the following independent assumption. (1) Assume that $300,000 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 Chen Inc., SY Telc can use the released productive resources to generate additional income of $300,000. (b) Describe the qualitative factors that might affect the decision to purchase the robots from an outside supplier
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