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Oriole is the creator of Y-Go, a technology that weaves silver into fabrics to kill bacteria and odour on clothing while managing heat. YGo has
Oriole is the creator of Y-Go, 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 1,000,000 Y-Go undergarments each year. The per-unit and total costs for the undergarment are as follows: The Canadian Armed Forces (CAF) has approached Oriole and expressed an interest in purchasing 223,000 Y-Go 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 $1 per undergarment to cover all other costs and provide a profit. Presently, Oriole is operating at 75% capacity and does not have any other potential buyers for Y-Go. If Oriole accepts the CAF's offer, it will not incur any variable selling expenses for this order. Using incremental analysis, determine whether Oriole should accept the CAF's offer. (Round per unit calculations to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 5,275.) Incremental revenue Incremental cost: Variable cost Incremental income Oriole should $ $ the Canadian forces' offer
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