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 1,087,000 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 $1.96 $2,130,520 Direct labor 0.41 445,670 Variable manufacturing overhead 0.99 1,076,130 Fixed manufacturing overhead 1.58 1,717,460 Variable selling expenses 0.30 326,100 Totals $5.24 $5,695,880 The U.S. Army has approached Klean Fiber and expressed an interest in purchasing 249,700 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 e.g. -45 or parentheses e.g. (45).)
Reject Order | Accept Order | Net
Income Increase (Decrease) |
|
Revenues | 0 | 1111165 | 1111165 |
Variable costs: | |||
Direct materials | 0 | -489412 | -489412 |
Direct labor | 0 | -102377 | -102377 |
Variable overhead | 0 | -247203 | -247203 |
Total variable costs | 0 | -838992 | -838992 |
Net income | 0 | 272173 | 272173 |
Workings: | |||
Revenues | =249700*(1.96+0.41+0.99+1.09) | ||
Variable costs: | |||
Direct materials | =249700*1.96 | ||
Direct labor | =249700*0.41 | ||
Variable overhead | =249700*0.99 |
Klean Fiber Company is the creator of Y-Go, a technology that weaves silver into its fabrics...
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 1,046,000 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
$1.99
$2,081,540
Direct labor
0.48
502,080...
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 1,065,000 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 $1.92 $2,044,800 Direct labor 0.43...
Klean Fiber Company is the creator of Y-Go, a technology that
weaves silver into its fabrics to kill bacteria....
Send to Gradebook Prev Next > bmitted to Gradebook, Wed Feb 26, 2020, 6:12 22 PM( A -05:00 rcaNew York Question 8 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...
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 1,099.000 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 Direct...
Exercise 20-4 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 1,000,000 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. Total Direct materials Direct labor Variable manufacturing overhead Fixed...
LAELEZO Sheridan 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 1,010,000 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 Total Undergarment $1.91 0.41 Direct materials Direct labor Variable...
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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 as an undergarment for sports activities. Operating at capacity, the company can produce 1,057,800 undergarments of Y-Go a year. The per unit and the total costs for an individual garment when the company operates at full capacity are...
Wilma Company must decide whether to make or buy some of its components. The costs of producing 63,800 switches for its generators are as follows. Direct materials $29,300 Variable overhead $44,200 Direct labor $30,634 Fixed overhead $82,800 Instead of making the switches at an average cost of $2.93 ($186,934 ÷ 63,800), the company has an opportunity to buy the switches at $2.74 per unit. If the company purchases the switches, all the variable costs and one-fourth of the fixed costs...
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Pottery Ranch Inc, has been manufacturing its own finials for its curtain rods. The company is currently operating at 100% of capacity, and variable manufacturing overhead is charged to production at the rate of 57% of direct labor cost. The direct materials and direct labor cost per unit to make a pair of finials are $3.81 and $4.54, respectively. Normal production is 35,000 curtain rods per year. A supplier offers to make a pair of finials at a price of...