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Exercise 7-6 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

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Exercise 7-6 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 mobile phone. The cost structure to manufacture 19,980 Tri-Robos is as follows Direct materials ($43 per robot) Direct labor (545 per robot) Variable overhead ($4 per robot) Allocated fixed overhead ($22 per robot) Cost $859,140 899,100 79,920 439,560 2,277,720 Total Jobs is approached by Tienh Inc., which offers to make Tri-Robo for $104 per unit or $2,077,920 Using incremental analysis, determine whether Jobs should accept this offer under each of the following independent assumptions Assume that $259,740 of the fixed overhead cost can be reduced (avoided). (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 Direct materials Direct labor Variable overhead Fixed overhead Purchase price Total annual cost

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