(Part Level Submission)

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 20,100 Tri-Robos is as follows.

CostDirect materials ($51 per robot)$1,025,100Direct labor ($40 per robot)804,000Variable overhead ($6 per robot)120,600Allocated fixed overhead ($30 per robot)600,000 Total$2,549,700

Jobs is approached by Tienh Inc., which offers to make Tri-Robo for $116 per unit or $2,331,600.

Following are independent assumptions.Warning

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(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. -45 or parentheses e.g. (45).)

MakeBuyNet 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 be acceptedshould not be accepted

.