Current Attempt in Progress Sandhill 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 $2,44,800 Direct labor 0.43 457,950 Variable manufacturing overhead 1.02 1,086,300 Fixed manufacturing overhead Variable selling expenses 1.53 1,629,450 0.37 394,050 Totals $5.27 $5,612,550 The U.S.Army has approached Sandhill Fiber and expressed an interest in purchasing 249,000 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, Sandhill Fiber is operating at 70% capacity and does not have any other potential buyers for Y-Go. If Sandhill Fiber accepts the Army's offer, it will not incur any variable selling expenses related to this order. Prepare an incremental analysis for the Sandhill Fiber. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg. (45).) Revenues Reject Order Accept Order $ $ Net Income Increase (Decrease)
Current Attempt in Progress Sandhill 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 $2,44,800 Direct labor 0.43 457,950 Variable manufacturing overhead 1.02 1,086,300 Fixed manufacturing overhead Variable selling expenses 1.53 1,629,450 0.37 394,050 Totals $5.27 $5,612,550 The U.S.Army has approached Sandhill Fiber and expressed an interest in purchasing 249,000 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, Sandhill Fiber is operating at 70% capacity and does not have any other potential buyers for Y-Go. If Sandhill Fiber accepts the Army's offer, it will not incur any variable selling expenses related to this order. Prepare an incremental analysis for the Sandhill Fiber. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg. (45).) Revenues Reject Order Accept Order $ $ Net Income Increase (Decrease)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Current Attempt in Progress
Sandhill 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
$2,44,800
Direct labor
0.43
457,950
Variable manufacturing overhead
1.02
1,086,300
Fixed manufacturing overhead
Variable selling expenses
1.53
1,629,450
0.37
394,050
Totals
$5.27
$5,612,550
The U.S.Army has approached Sandhill Fiber and expressed an interest in purchasing 249,000 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, Sandhill Fiber is operating at 70% capacity and does not have any other potential buyers for Y-Go. If Sandhill Fiber accepts
the Army's offer, it will not incur any variable selling expenses related to this order.
Prepare an incremental analysis for the Sandhill Fiber. (Enter negative amounts using either a negative sign preceding the number eg.-45 or
parentheses eg. (45).)
Revenues
Reject
Order
Accept
Order
$
$
Net Income
Increase
(Decrease)
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