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Kingbird is the creator of Y - G o 0 , a technology that weaves silver into fabrics to kill bacteria and odour on clothing
Kingbird is the creator of a technology that weaves silver into fabrics to kill bacteria and odour on clothing while
managing heat. YGo has become very popular in undergarments for sports activities. Operating at capacity, the
company can produce YGo undergarments each year. The perunit and total costs for the undergarment are
as follows:
The Canadian Armed Forces CAF has approached Kingbird and expressed an interest in purchasing YGo
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 $ per undergarment to cover all other costs and provide a profit. Presently, Kingbird is operating at
capacity and does not have any other potential buyers for 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 decimal places, eg and final answers to decimal places, eg
Incremental revenue
$
Incremental cost:
Variable cost
Incremental income
vdots
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