Kingbird is the creator of $Y-G{o}_0,$ a technology that weaves silver into fabrics to kill bacteria and odour 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 each year. The per$-$unit and total costs for the undergarment are

as follows:

The Canadian Armed Forces $($CAF$)$ has approached Kingbird and expressed an interest in purchasing $213,000$ Y$-$Go

undergarments for soldiers stationed in extremely warm climates. The CAF would pay the unit cost for direct

materials, direct labour, and variable manufacturing overhead costs. In addition, the CAF has agreed to pay an

additional $$1$ per undergarment to cover all other costs and provide a profit. Presently, Kingbird is operating at $70\%$

capacity and does not have any other potential buyers for $Y-$Go$.$ If Kingbird accepts the CAF's offer, it will not incur any

variable selling expenses for this order.

$($a$)$

Using incremental analysis, determine whether Kingbird should accept the CAF's offer. $($Round per unit

calculations to $2$ decimal places, e$.$g$.15\mathrm{.}25$ and final answers to $0$ decimal places, e$.$g$.5\mathrm{.}275.)$

Incremental revenue

$

Incremental cost:

Variable cost

Incremental income

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