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 21,100 Tri-Robos is as follows.

Cost Direct materials ($49 per robot) Direct labor ($40 per robot) Variable overhead ($7 per robot) Allocated fixed overhead ($28 per robot) $1,033,900 844,000 147,700 600,000 $2,625,600 Total obs is approached by Tienh Inc., which offers to make Tri-Robo for $114 per unit or $2,405,400 Following are independent assumptions (a1) 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. -15 or parentheses e.g. (15).) Net Income Increase (Decrease) Make Buy Direct materials Direct labor Variable overhead Fixed overhead Purchase price Total annual cost $