JOB inc. has recently started the manufacture ofTriRobo, a three-wheeled robotthat can scan a home for fires and gas leaks and then transmit this information to a mobile phone.The cost structure to manufacture19980 TriRobosis as follows

.Cost

Direct materials ($48 per robot) $ 959040

Direct labor ($41 per robot) 819180

Variable overhead ($7 per robot) 139860

Allocated fixed overhead ($23 per robot) 459540

Total $2377620

Job Inc. is approached by Tulsa Inc. which offers to makeTriRobo for $1 per unitor$2137860

.(a) Using incremental analysis, determine whether Security Co. should accept this offer undereach of the following independent assumptions.

(1) Assume that$259740 of the fixed overhead cost can be reduced(avoided)

(2)

Assume thatnone of the fixed overhead can be reduced(avoided). However, if therobots are purchased from Tulsa Inc., Security Co.can use the released productiveresources to generate additional income of $259740