Klean 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 1,047,000 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 Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses $1.91 0.45 1.07 1.59 0.33 $5.35 $1,999,770 471,150 1,120,290 1,664,730 345,510 $5,601,450 Totals 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 $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 vanable selling expenses related to this order. Prepare an incremental analysis for the Klean Fiber. (Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) Reject Order Accept Order Net Income Increase (Decrease) Revenues 864915 864915 Variable costs: Direct materials Direct labor Variable overhead 47883 -47883 11281 11281 26824 -26824 -85990 5014 Total variable costs 859901 Net income 5014