Sheridan, 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 19,400 Tri-Robos is as follows. Cost Direct materials ($49 per robot) $950,600 Direct labor ($37 per robot) 717,800 Variable overhead ($6 per robot) 116,400 Allocated fixed overhead ($31 per robot) 601,400 Total $2,386,200 Sheridan is approached by Tienh Inc., which offers to make Tri-Robo for $112 per unit or $2,172,800. 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).) Net Income Increase (Decrease) Make Direct materials $ Direct labor Variable overhead Fixed overhead Purchase price Total annual cost $ Using incremental analysis, determine whether Sheridan should accept this offer. Assume that none of the fixed overhead can be avoided. However, if the robots are purchased from Tienh Inc., Sheridan can use the released productive resources to generate additional income of $375,000. (E negative sign preceding the number e.g.-45 or parentheses e.g. (45).) Net Income Increase (Decrease) Make Buy Direct materials $ Direct labor Variable overhead Fixed overhead Opportunity cost Purchase price Totals Based on the above assumptions, indicate whether the offer should be accepted or rejected? The offer Save for later