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
Total		$2,520,000

Jobs is approached by Tienh Inc., which offers to make Tri-Robo for $115 per unit or $2,300,000. Following are independent assumptions.

Net Income Increase (Decrease) Make Buy Direct materials S $ 1000000 i $ i $ 1000000 Direct labor 800000 i i 800000 Variable overhead 120000 i i 120000 Fixed overhead 600000 i 375000 405000 Purchase price FO 2300000 i -2300000 Total annual cost $ 2895000 $ 1925000 $ 25000 Using incremental analysis, determine whether Jobs should accept this offer. The offer should be accepted