Blossom Company is the creator of Y-Go, a technology that weaves silver into its fabrics to kill bacteria and odor on clothing while managing heat. Y-Go has become very popular in undergarments for sports activities. Operating at capacity, the company can produce 1,031,000 Y-Go undergarments a year. The per unit and the total costs for an individual garment when the company operates at full capacity are as follows.

		Per Undergarment			Total
Direct materials		$2.04			$2,103,240
Direct labor		0.40			412,400
Variable manufacturing overhead		1.04			1,072,240
Fixed manufacturing overhead		1.44			1,484,640
Variable selling expenses		0.34			350,540
Totals		$5.26			$5,423,060

The U.S. Army has approached Blossom and expressed an interest in purchasing 250,100 Y-Go undergarments for soldiers in extremely warm climates. The Army would pay the unit cost for direct materials, direct labor, and variable manufacturing overhead costs. In addition, the Army has agreed to pay an additional $0.95 per undergarment to cover all other costs and provide a profit. Presently, Blossom is operating at 70% capacity and does not have any other potential buyers for Y-Go. If Blossom accepts the Armys offer, it will not incur any variable selling expenses related to this order.

Prepare an incremental analysis for the Blossom. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

		Reject Order		Accept Order		Net Income Increase (Decrease)
Revenues		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount
Variable costs:
Direct materials		enter a dollar amount		enter a dollar amount		enter a dollar amount
Direct labor		enter a dollar amount		enter a dollar amount		enter a dollar amount
Variable overhead		enter a dollar amount		enter a dollar amount		enter a dollar amount
Total variable costs		enter a total dollar amount		enter a total dollar amount		enter a total dollar amount
Net income		$enter a total dollar amount for net income		$enter a total dollar amount for net income		$enter a total dollar amount for net income

Should Blossom accept the Army's offer?

Blossom should select an option acceptreject the Armys offer.