. Special Hat Sales. A. J., Inc. can make 10,000 caps per year. A. J. can sell 9,000 caps per year to NASCAR racing fans for \(\$ 10\) per hat. The company's cost per hat based on making 10,000 caps is:

Overhead costs . . . . . . 3.00 (Overhead is two-thirds fixed at that volume.)
Sugar Ray Hinsky offers to buy 1,000 hats with special boxing insignias for \(\$ 7\) per hat. Attaching special insignias will cost A. J. \$200.
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What should A. J. do? Explain.

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Prime costs... Overhead costs.... $5.00 3.00