Sheridan, Inc. has recently started the manufacture of Tri-Robo, a three-wheeled robot that can scan a home for firesand gas leaks and then transmit this information to a smartphone. The cost structure to manufacture 19,600 Tri-Robosis as follows.CostDirect materials ($50 per robot)$980,000Direct labor ($39 per robot)764,400Variable overhead ($7 per robot)137,200Allocated fixed overhead ($31 per robot)607,600Total$2,489,200Sheridan is approached by Tienh Ic., which offers to make Tri-Robo for $116 per unit or $2,273,600.Following are independent assumptions.Assume that $405,000 of the fixed overhead cost can be avoided. (Enter negative amounts using either anegative sign preceding the number e.g. -45 or parentheses e.g. (45).)Net IncomeIncreaseMakeBuy(Decrease)Direct2$materials980,000$2$Direct764,400laborVariable137,200overheadFixed607,600overheadPurchasepriceTotalannual2$2489200$$costUsing incremental analysis, determine whether Sheridan should accept this offer.The offer Assume that none of the fixed overhead can be avoided. However, if the robots are purchased from Tienh Inc.,Sheridan can use the released productive resources to generate additional income of $375,000. (Enter negativeamounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)Net IncomeIncreaseMakeBuy(Decrease)Direct$980,000$materialsDirect labor764,400Variable137,200overheadFixed607,600overheadOpportunitycostPurchasepriceTotals$Based on the above assumptions, indicate whether the offer should be accepted or rejected?The offer%24%24%24%24%24

The differential analysis is performed to analyze the two different alternatives available for the…

Sheridan, 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 19,600 Tri-Robos is as follows. Cost Direct materials ($50 per robot) $980,000 Direct labor ($39 per robot) 764,400 Variable overhead ($7 per robot) 137,200 Allocated fixed overhead ($31 per robot) 607,600 Total $2,489,200

Sheridan, 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 19,600 Tri-Robos is as follows. Cost Direct materials ($50 per robot) $980,000 Direct labor ($39 per robot) 764,400 Variable overhead ($7 per robot) 137,200 Allocated fixed overhead ($31 per robot) 607,600 Total $2,489,200

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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