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Selleck has recently started the manufacture of RecRobo, a threewheeled robot that can scan a home for fires and gas leaks and then transmit this...

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Selleck
Selleck has recently started the manufacture of RecRobo, a three-wheeled robot that can scan a home for fires and gas  leaks and then transmit this information to a mobile phone. The cost structure to manufacture 19,930 RecRobo's is as  follows.  Cost Direct materials ($37 per robot) $737,410 Direct labor ($32 per robot) 637,760 Variable overhead ($7 per robot) 139,510 Allocated fixed overhead ($25 per robot) 498,250 Total $2,012,930 Selleck is approached by Padong Inc. which offers to make RecRobo for $91 per unit or $1,813,630.  Using incremental analysis, determine whether Selleck should accept this offer under each of the following independent  assumptions.  (If answer is zero, please enter 0. Do not leave any fields blank. If amount decreases the income, use   either a negative sign preceding the number eg -45 or parentheses eg (45).)   (1) Assume that $318,880 of the fixed overhead cost can be reduced (avoided).  Make Buy Net Income Increase (Decrease) Direct materials $ $ $ Direct labor Variable Overhead Fixed Overhead Purchase Price Total Annual Cost $ $ $ Should the offer be accepted?  (2) Assume that none of the fixed overhead can be reduced (avoided). However, if the robots are purchased from Padong  Inc., Selleck can use the released productive resources to generate additional income of $318,880.  Make Buy Net Income Increase (Decrease) Direct materials $ $ $ Direct labor Variable Overhead Fixed Overhead Opportunity Cost Purchase Price Totals $ $ $ Should the offer be accepted? 
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