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Ivanhoe 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

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Ivanhoe 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 1,094,000 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. mzergarment Total Direct materials $2.03 $2,275,520 Direct labor 0.44 481,360 Variable manufacturing overhead 0.99 1,033,060 Fixed manufacturing overhead 1.44 1,575,360 Variable selling expenses 0.39 426,660 Totals $5.34 $5,841,960 The US. Army has approached Ivanhoe Fiber and expressed an interest in purchasing 250,800 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 prot. Presently, Ivanhoe Fiber is operating at 70% capacity and does not have any other potential buyers for Y-Go. If Ivanhoe Fiber accepts the Army's offer, it will not incur any variable selling expenses related to this order. Prepare an incremental analysis for the Ivanhoe Fiber. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net Income Reject Accept Increase Order Order (Decrease) Revenues $ $ Variable costs: Direct materials Direct labor Variable overhead Total variable costs Net income $

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