Exercise 20-4 (Part Level Submission)

Can you please show the work to the solutions so I can understand how to do it

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 as an undergarment for sports activities. Operating at capacity, the company can produce 1,082,700 undergarments of Y-Go 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	$2.00	$2,165,400
Direct labor	0.46	498,042
Variable manufacturing overhead	0.97	1,050,219
Fixed manufacturing overhead	1.51	1,634,877
Variable selling expenses	0.37	400,599
Totals	$5.31	$5,749,137

The U.S. Army has approached Klean Fiber and expressed an interest in purchasing 250,900 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 $1.03 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. If Klean Fiber accepts the Armys offer, it will not incur any variable selling expenses related to this order.

(a) Prepare an incremental analysis for the Klean Fiber. (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	$	$	$
Variable costs:
Direct materials
Direct labor
Variable overhead
Total variable costs
Net income	$	$	$