E7-4 Klean Fiber 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 1,000,000 Y-Go undergarments a year. The per unit and the total costs for an indi- vidual garment when the company operates at full capacity are as follows. Per UndergarmentTotal Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses $2.00 0.75 1.00 1.50 0.25 $5.50 $2,000,000 750,000 1,000,000 1,500,000 250,000 $5,500,000 Totals The U.S. Army has approuched Klean Fiber and expressed an interest in purchasing 250,000 Y-Go undergarments for soldiers in extremely warm elimates. 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 S I per undergarment to cover all other costs and provide a profit. Presently Klean Fiber is operating at 70% capacity and does not have any other potential buyers for Y-Go. It Klean Fiber accepts the Army's offer it will not incur any variable selling expenses related to this order Instructions Using incremental analysis, determine whether Klean Fiber should accept the Army's of nt