Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed

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 1,083.000 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 $ 2.05 Total $ 2.220.150 0.46 498,180 1.03 1.115,490 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Totals 1.48 1.602.840 0.33 357,390 $ 5.794.050 $5.35 The U.S. Army has approached Klean Fiber and expressed an interest in purchasing 249.500 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 $ 1.09 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 variable 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 eg.-45 or parentheses e.g. (45).) Reject Order Accept Order Net Income Increase (Decrease) Revenues $ $ Variable costs: Direct materials Direct labor Variable overhead Total variable costs Net income $ Should Klean Fiber accept the Army's offer? Klean Fiber should accept the Army's offer

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Routledge Handbook Of Environmental Accounting

Authors: Jan Bebbington, Carlos Larrinaga, Brendan O'Dwyer, Ian Thomson

1st Edition

0367724901, 9780367724900

More Books

Students also viewed these Accounting questions

Question

Define line and staff authority

Answered: 1 week ago

Question

Define the process of communication

Answered: 1 week ago

Question

Explain the importance of effective communication

Answered: 1 week ago

Question

* What is the importance of soil testing in civil engineering?

Answered: 1 week ago

Question

I didnt know who to talk to.

Answered: 1 week ago

Question

Th e complaint department was closed over the lunch hour.

Answered: 1 week ago

Question

Th ey probably would have treated me like a criminal.

Answered: 1 week ago