Klean Fiber Company is the creator of Y-Go, a technology that weaves siver 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 1,063,0DD Y-Go undergarments a year. The per unit and the total costs far an individual garment when the campany aperates at full capacity are as folows Direct materials Direct lahor Variable manufacturing overhead Fxed manufacturing overhead Variable sellng expenses Total 2,115,30 553,390 1,063,000 1,658,910 1.00 1.57 0.35 $5,44 372,050 Totals $5,782,720 The U.S. Army has appraached Klean Fiber and expressed an intarast in purchasing 249,ado Y Go undergarments far soldiers in extremely warm cmates. The Army would pay the unit cast far direct materials, direct labor, and vaile manufacturing overhead costs. n dddition, the Arrnr has dgleed o pay an add oral $1.04 per uridergdllnent to cover all other costs and provide a profiL Presently, Kledn Fiber is operating a 70% capea y an d es not have any other poterwal buyers or Y r ed Iber dccepts he Anny's offer, wil not ncur any variable seling expenses related to this order