Exercise 7-6 a1-a2 (Video) 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 20,000 Tri-Robos is as follows. Cost Direct materials ($50 per robot) $1,000,000 Direct labor ($40 per robot) 800,000 Variable overhead ($6 per robot) 120,000 Allocated fixed overhead ($30 per robot) 600,000 $2,520,000 Total Jobs is approached by Tienh Inc., which offers to make Tri-Robo for $115 per unit or $2,300,000 Following are independent assumptions. Your answer is partially correct. Try again. Assume that $405,000 of the fixed overhead cost can be avoided. (Enter negative amounts using either negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net Income Increase (Decrease) Make Buy 1,000,000 1,000,000 Direct materials Direct labor 800,000 800,000 Variable overhead 120,000 120,000 405,000 Fixed overhead 405,000 Purchase price 2,300,000 -2,300,000 x 2,300,000 25,000 Total annual cost 2,325,000 Using incremental analysis, determine whether Jobs should accept this offer. The offer Should be accepted Your answer is partially correct. Try again. 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).) Net Income Increase (Decrease) Make Buy 1,000,000 1,000,000 Direct materials 800,000 Direct labor 800,000 Variable overhead 120,000 120,000 Fixed overhead 375,000 -375,000 Opportunity cost Purchase price 2,300,000 -2,300,000 -5,000 1,925,000 Totals 1,920,000 Based on the above assumptions, indicate whether the offer should be accepted or rejected? should be accepted