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 20,400 Tri-Robos is as follows.

Cost:

Direct materials ($51 per robot) $1,040,400

Direct labor ($39 per robot) $795,600

Variable overhead ($7 per robot) $142,800

Allocated fixed overhead ($29 per robot) $600,000

Total. $2,578,800

Jobs is approached by Tienh Inc., which offers to make Tri-Robo for $116 per unit or $2,366,400.

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:"should not be accepted" or "should be accepted."