Selleck has recently started the manufacture of recrobo a
Course:- Accounting Basics
Reference No.:- EM13601528

Assignment Help
Assignment Help >> Accounting Basics

Selleck has recently started the manufacture of RecRobo, a three wheeled robot that can scan ahome for fires and gas leaks and then transmit this information to a mobile phone. The cost structure to manufacture 20,100 RecRobo's is as follows.

  • Direct materials ( $40 per robot) $804,000
  • Direct labor ($30 per robot) 603,000
  • Variable overhead ($4 per robot ) 80,400
  • Allocated fixed overhead ($25 per robot) 502,500
  • Total 1,989,900

Selleck is approached by Padong Inc. which offers to make RecRobo for $89 per unit or $1,788,900. Use incremental analysis determine whether Selleck should accept this offer under each of the following independent assumptions.
Assume that $321,600 of the fixed overhead cost can be reduced (avoided).

  • Make buy net income increase/decrease
  • Direct materials
  • Direct labor
  • Variable overhead
  • Fixed overhead
  • Purchase price
  • Total annual cost

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Accounting Basics) Materials
1. Suppose a company uses the direct write-off method instead of the allowance method in accounting for uncollectible accounts. What is the impact on the accounting equation o
During the first year of partnership operations, JK had net taxable income of $50,000. The partnership distributed $20,000 cash to Julie. Julie's adjusted basis (outside bas
The company has three activity cost pools and applies overhead using predetermined overhead rates for each activity cost pool. Estimated costs and activities for the current
Show how each transaction affects the financial statements by placing a + for increase for decrease, and NA for not affected under each component in a horizontal statements mo
How should Darr Equipment classify the lease in its accounting records? (minimum information should include ASC citation regarding lease classification you state as your ans
the June 15 sale consists of 3 fishing reels from beginning inventory and 11 fishing reels from the June 12 purchase, and the June 27 sale consists of 1 fishing reel from be
Watch the "Types of Power" tutorial at the end of your lecture, and write a 300-500 word essay about what you learned from the video. Answer the following questions: type of
Part A is designed to enhance your analytical skills that are essential in making decisions. It is expected that you will demonstrate an ability to identify underlying issues