Question 8 of 13 > -/15 View Policies Current Attempt in Progress 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 1,074,000 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 $2.06 $2,212,440 Direct labor 0.50 537,000 Variable manufacturing overhead 1.01 1,084,740 1.50 1,611,000 Fixed manufacturing overhead Variable selling expenses 0.32 343,680 Totals $5.39 $5,788,860 The U.S. Army has approached Klean Fiber and expressed an interest in purchasing 250,500 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 $1.01 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 eg. (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 the Army's offer. e Textbook and Media Save for later Attempts: 0 of 3 used Submit