Create an incremental analysis for the klean fiber

Assignment Help Accounting Basics
Reference no: EM131800022

Problem

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.


Per Undergarment

Total

Direct materials

$2.00

$2,000,000

Direct labor

0.75

750,000

Variable manufacturing overhead

1.00

1,000,000

Fixed manufacturing overhead

1.50

1,500,000

Variable selling expenses

0.25

250,000

   Totals

$5.50

$5,500,000

The U.S. Army has approached Klean Fiber and expressed an interest in purchasing 250,000 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 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).)

Should Klean Fiber accept the Army's offer?

Reference no: EM131800022

Questions Cloud

Important human resource of all : Creativity is the most important human resource of all. Without creativity there would be no progress, and we would be forever repeating the same patterns.
What are the key dimensions of critical thinking : Watch the NBC Learn video on Diet Scams. What types of claims are made in this video? Are they valid? Elaborate on your responses.
Journalize the entries for may : On May 10, a company issued for cash 1,500 shares of $2 par common stock at $14, and on May 15, Journalize the entries for May 10 and 15
Probability that a mechanic will be available : Assume an 8 hour day. What is the probability that a mechanic will be available immediately when a snowplow arrives for repair?
Create an incremental analysis for the klean fiber : Klean Fiber Company is the creator of Y-Go, technology that weaves silver into its fabrics to kill bacteria. Create an incremental analysis for the Klean Fiber.
What three main techniques are available for improving : What three main techniques are available for improving communication in negotiation? And why?
Determining the ambulatory healthcare facility : How would you fund, build, staff, and supply a new ambulatory healthcare facility while still running the hospital?
Provide a real-world example of your research method : Using your research skills, pick one method of either pseudo sale, controlled sale, or full sale and describe how it is (or would be) used to test a product.
Prepare a multiple-step income statement : Prepare a multiple-step income statement combined with a reconciliation of retained earnings for the year ended December 31, 2008

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  Generate and submit the given reports to client

You are working as an accountant in a regional accounting firm. You have been approached by the owner of "Goodie Gumdrops", a start-up wholesaler.

  Compute the amount of interest paid in july

Compute the amount of interest paid in July. At June 30, 2014, none was payable. How much debt did Fargo pay off in July

  Corans delivery company and enrights express delivery

Coran's Delivery Company and Enright's Express Delivery exchanged delivery trucks on January 1, 2010. Coran's truck cost $22,000. It has accumulated depreciation of $15,000 and a fair market value of $4,000.

  The standard operating capacity of corona manufacturing co

the standard operating capacity of corona manufacturing co. is 1000 units. a detailed study of the manufacturing data

  What is the gross profit per tile on job

London Ceramics makes custom ceramic tiles. During March, the company started and finished Job #266. What is the gross profit per tile on Job #266

  Segregation of duties is important concept in internal

segregation of duties is an important concept in internal control. however segregation of duties is often a challenge

  Market price of a company common stock

An increase in the market price of a company's common stock will immediately affect its:

  In 2011 masset sold 3000 units at 300 each variable

in 2011 masset sold 3000 units at 300 each. variable expenses were 210 per unit and fixed expenses were 120000. the

  Compute the direct labor efficiency and rate variances for

monte rosa corporation produces two products alpha8s and zeta9s which pass through two operations sintering and

  Explain the uses of gross and contribution margins

Compare and contrast gross margin and contribution margin

  Enacted tax rate-current and future periods

The enacted tax rate is 25% in current and future periods. What will White record as its income tax expense in Year 1?

  What is the amount of the payments

What is the amount of the payments that Jonathon must make at the end of each of 12 years to accumulate a fund of $220,000 by the end of the twelvth year

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd