Wildhorse 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 1,002,000 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. Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Totals Per Undergarment $2.03 0.45 1.10 1.43 0.36 $5.37 Total $2,034,060 450,900 1,102,200 1,432,860 360,720 $5,380,740 The U.S. Army has approached Wildhorse Fiber and expressed an interest in purchasing 250,200 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, Wildhorse Fiber is operating at 70% capacity and does not have any other potential buyers for Y-Go. If Wildhorse Fiber accepts the Army's offer, it will not incur any variable selling expenses related to this order. Prepare an incremental analysis for the Wildhorse Fiber. (Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses eg. (45).) 638 PM Prepare an incremental analysis for the Wildhorse Fiber. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses es.(45).) Reject Order Accept Order Net Income Increase (Decrease) Revenues $ $ $ Variable costs: Direct materials Direct labor Variable overhead Total variable costs Net income $ $ Should Wildhorse Fiber accept the Army's offer? Wildhorse Fiber should the Army's offer. Sheridan Company has a factory machine with a book value of $87,000 and a remaining useful life of 7 years. It can be sold for $34,000. A new machine is available at a cost of $361,000. This machine will have a 7-year useful life with no salvage value. The new machine will lower annual variable manufacturing costs from $593,200 to $509,900. Prepare an analysis showing whether the old machine should be retained or replaced. (In the first two columns, enter costs and expenses as positive amounts, and any amounts received as negative amounts. In the third column, enter net income increases as positive amounts and decreases as negative amounts. Enter negative amounts using either a negative sign preceding the number eg. 15 or parentheses es. (451) Retain Equipment Replace Equipment Net Income Increase (Decrease) Variable manufacturing costs $ $ New machine cost Sell old machine Total $ replaced retained The old factory machine should be