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Klcan Aber Company is the crestor of Y-Ga, a tectnalcgy thar weaves sllver into its faarics to kill bacena and odor an cothing while manag
Klcan Aber Company is the crestor of Y-Ga, a tectnalcgy thar weaves sllver into its faarics to kill bacena and odor an cothing while manag ng heat. Y-Ga has become very popular in undergarments for sparts activitics. Operating at capecity, the campany can producc 1,099,aua -Ga undergamients year. The per unit und the total costs for an individual garment when te cumpeny operates at full capacity ere us follws. Per UndergarmentTotal $2.10 0.42 0.98 Direct labor Varieble manufacturing overhead Fixed manufacturing ovenead Variabla selling expenses $2,3u7,90D 461,590 1,077,020 1,538,600 406,630 $5,791.730 Totals U Army has apprected Klean Mber er d expressed n interest in purchasnu 250 200 Y 30 undergarments ur sodersin extremely war 1 imates he Army wuuld pay the unit cost or direct matenals, direct la o ar van ble manufacturing overheac Dosts n addi on the An nas egreed to pay an additicnal $1.00 per undergarment to cover all ather costs and provide e profit. Presently, Kleen Fiber is operating at 70% capacity and does rot heve any other potential buyers fer Y-Go. If Klean Fiber accepts the Arrmy's offer, it will not incur eny variable selling axcenses related to this order Prepere an incremental analysis furthe idean Fiber. (Enter negative amounts using either negative sign preceding the number e'g 45 or parentheses e g (45).) Net Income Accept (Decrease) Variable overhead Tatal variable costs Net income Should Klean Fiber accept the Army's offer
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