Crane, 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 20,200 Tri-Robos is as follows.

		Cost
Direct materials ($48 per robot)		$969,600
Direct labor ($42 per robot)		848,400
Variable overhead ($7 per robot)		141,400
Allocated fixed overhead ($30 per robot)		606,000
Total		$2,565,400

Crane is approached by Tienh Inc., which offers to make Tri-Robo for $116 per unit or $2,343,200. Following are independent assumptions.

(a1)

Assume that $405,000 of the fixed overhead cost can be avoided. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

		Make		Buy		Net Income Increase (Decrease)
Direct materials		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount
Direct labor		enter a dollar amount		enter a dollar amount		enter a dollar amount
Variable overhead		enter a dollar amount		enter a dollar amount		enter a dollar amount
Fixed overhead		enter a dollar amount		enter a dollar amount		enter a dollar amount
Purchase price		enter a dollar amount		enter a dollar amount		enter a dollar amount
Total annual cost		$enter a total dollar amount		$enter a total dollar amount		$enter a total dollar amount

Using incremental analysis, determine whether Crane should accept this offer.

The offer select an option should not be acceptedshould be accepted.