Assume that none of the fixed overhead can be avoided. However, if the robots are purchased from Tienh Inc., Blossom can use the released productive resources to generate additional income of $375,000. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Direct materials Direct labor Variable overhead Fixed overhead Opportunity cost Purchase price Totals $ The offer $ Make $ $ Buy $ $ Based on the above assumptions, indicate whether the offer should be accepted or rejected? Net Income Increase (Decrease)
Assume that none of the fixed overhead can be avoided. However, if the robots are purchased from Tienh Inc., Blossom can use the released productive resources to generate additional income of $375,000. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Direct materials Direct labor Variable overhead Fixed overhead Opportunity cost Purchase price Totals $ The offer $ Make $ $ Buy $ $ Based on the above assumptions, indicate whether the offer should be accepted or rejected? Net Income Increase (Decrease)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please do not give solution in image format ? and explain proper steps by Step.
Transcribed Image Text:Blossom, 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 20,100 Tri-Robos is as follows.
Direct materials ($51 per robot)
Direct labor ($40 per robot)
Variable overhead ($6 per robot)
Allocated fixed overhead ($30 per robot)
Total
Cost
Following are independent assumptions.
$1,025,100
804,000
120,600
603,000
$2,552,700
Blossom is approached by Tienh Inc., which offers to make Tri-Robo for $116 per unit or
$2,331,600.
Transcribed Image Text:Assume that none of the fixed overhead can be avoided. However, if the robots are purchased from Tienh Inc., Blossom can use
the released productive resources to generate additional income of $375,000. (Enter negative amounts using either a negative sign
preceding the number e.g. -45 or parentheses e.g. (45).)
Direct materials
Direct labor
Variable overhead
Fixed overhead
Opportunity cost
Purchase price
Totals
Make
The offer
LA
$
Buy
tA
$
Based on the above assumptions, indicate whether the offer should be accepted or rejected?
Net Income
Increase
(Decrease)
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