Exercise 21-6 Jobs, 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 21,300 Tri-Robos is as follows.

Cost
Direct materials ($51 per robot)	$1,086,300
Direct labor ($39 per robot)	830,700
Variable overhead ($5 per robot)	106,500
Allocated fixed overhead ($28 per robot)	600,000
Total	$2,623,500

Jobs is approached by Tienh Inc., which offers to make Tri-Robo for $113 per unit or $2,406,900. Following are independent assumptions.

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	$	$	$
Direct labor
Variable overhead
Fixed overhead
Purchase price
Total annual cost	$	$	$

Using incremental analysis, determine whether Jobs 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., Jobs 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).)

Make	Buy	Net Income Increase (Decrease)
Direct materials	$	$	$
Direct labor
Variable overhead
Fixed overhead
Opportunity cost
Purchase price
Totals	$	$	$

Based on the above assumptions, indicate whether the offer should be accepted or rejected?

The offer

.