Exercise 7-1 Klean Fiber Company is the creator of Y-Go, a technology that weaves silver into its fabrics to fill bacteria and odor on dothing while managing heat. Y-Gohan become very popular in undergarments for sports activities Operating at capacity, the company can produce 1,047,000 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 $1.91 51,999,270 Direct labor 0.45 471,150 Variable manufacturing overhead 1.02 1.120,290 Fixed manufacturing overhead 1.59 1,664,730 Variable selling expenses 0.33 245,510 Totals $5.35 55.601.450 The U.S. Army has approached Klean Fiber and expressed an interest in purchasing 250,700 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 51.02 per undergarment to cover all other couts 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 accept the Army's offer, it will not incur any variable selling expenses related to this order Prepare an incremental analysis for the Klean Fiber Net Income Reject Accept Increase Order Order (Decrease) Rovenues Variable con Direct material Direct labor The US Army has approached Klean Fiber and expressed an interest in purchasing 250,700 Y-Go undergarments for soldiers in extremely warm climate The Army would pay the unit cost for direct materials, direct labor, and variable manufacturing overhead cost addition, the Army has agreed to pay an additional $1.02 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 Army's offer, it will not incur any variable selling expenses related to this order Prepare an incremental analynis for the Klean Aben Net Income Reject Accept Increase Order Order (Decrease) Revenues Variable cost Direct materiale Direct labor Variable overhead Total variable costs Not Income Should Kean Fiber accept the Army's offer Kan fiber should the Army otter to Show Work for this question:ue ho