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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

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 21,400 Tri-Robos is as follows.

Cost
Direct materials ($52 per robot) $1,112,800
Direct labor ($39 per robot) 834,600
Variable overhead ($5 per robot) 107,000
Allocated fixed overhead ($28 per robot) 599,200
Total $2,653,600

Jobs is approached by Tienh Inc., which offers to make Tri-Robo for $114 per unit or $2,439,600. 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 $enter direct materials in dollars $enter direct materials in dollars $enter direct materials in dollars
Direct labor enter direct labor in dollars enter direct labor in dollars enter direct labor in dollars
Variable overhead enter variable overhead in dollars enter variable overhead in dollars enter variable overhead in dollars
Fixed overhead enter fixed overhead in dollars enter fixed overhead in dollars enter fixed overhead in dollars
Purchase price enter the purchase price in dollars enter the purchase price in dollars enter the purchase price in dollars
Total annual cost $enter total annual cost in dollars $enter total annual cost in dollars $enter total annual cost in dollars

Using incremental analysis, determine whether Jobs should accept this offer.

The offer select an option should be acceptedshould not be accepted.

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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).)

Make Buy Net Income Increase (Decrease)
Direct materials $enter direct materials in dollars $enter direct materials in dollars $enter direct materials in dollars
Direct labor enter direct labor in dollars enter direct labor in dollars enter direct labor in dollars
Variable overhead enter variable overhead in dollars enter variable overhead in dollars enter variable overhead in dollars
Fixed overhead enter fixed overhead in dollars enter fixed overhead in dollars enter fixed overhead in dollars
Opportunity cost enter the opportunity cost in dollars enter the opportunity cost in dollars enter the opportunity cost in dollars
Purchase price enter the purchase price in dollars enter the purchase price in dollars enter the purchase price in dollars
Totals $enter total amount in dollars $enter total amount in dollars $enter total amount in dollars

Based on the above assumptions, indicate whether the offer should be accepted or rejected?

The offer select an option should not be acceptedshould be accepted.

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