Sunland, 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 19,700 Tri-Robos is as follows. Direct materials ($52 per robot) Direct labor ($40 per robot) Variable overhead ($7 per robot) Allocated fixed overhead ($30 per robot) Total Cost (a1) $1,024,400 788,000 137,900 591,000 $2,541,300 Sunland is approached by Tienh Inc., which offers to make Tri-Robo for $119 per unit or $2,344,300. Following are independent assumptions.

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Sunland, 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 19,700 Tri-Robos is as follows.
Direct materials ($52 per robot)
Direct labor ($40 per robot)
Variable overhead ($7 per robot)
Allocated fixed overhead ($30 per robot)
Total
Cost
(a1)
$1,024,400
788,000
137,900
591,000
$2,541,300
Sunland is approached by Tienh Inc., which offers to make Tri-Robo for $119 per unit or $2,344,300.
Following are independent assumptions.
Transcribed Image Text:Sunland, 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 19,700 Tri-Robos is as follows. Direct materials ($52 per robot) Direct labor ($40 per robot) Variable overhead ($7 per robot) Allocated fixed overhead ($30 per robot) Total Cost (a1) $1,024,400 788,000 137,900 591,000 $2,541,300 Sunland is approached by Tienh Inc., which offers to make Tri-Robo for $119 per unit or $2,344,300. Following are independent assumptions.
Assume that none of the fixed overhead can be avoided. However, if the robots are purchased from Tienh Inc., Sunland 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
2
$
$
Buy
$
$
Net Income
Increase
(Decrease)
Transcribed Image Text:Assume that none of the fixed overhead can be avoided. However, if the robots are purchased from Tienh Inc., Sunland 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 2 $ $ Buy $ $ Net Income Increase (Decrease)
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