Gagalicious Industries makes products for the ever growing group of "Little Monsters'. Currently the firm has three major business units: meat gowns, eyeglasses, and hats. The company has just received a request for 500 meat dresses to be used in a commercial shoot. These meat dresses are outside the normal budgeted sales of the firm and there is plenty of capacity to accept. The production company has offered to pay $52 per dress. The firm has the following information: Dresses 16,000 $65 $19 $33 Units Sold Selling Price per Unit Variable Cost per Unit Fixed Cost per Unit Eyeglasses 40,000 $35 $14 $6 Hats 22,000 $44 $25 $21 The firm expects that taking the special order will result in the loss of the sale of 260 hats al regular prices. ROUND ALL CALCULATIONS TO THE NEAREST HUNDREDTH (two decimal places). 1. What is the net effect on income of accepting the special order. Put the ABSOLUTE VALUE of the effect in the box below and then select whether it increases or decreases income. Income Effect $0 lo O Increase in income Decrease in income. Assume business continues as usual without the special order. Additionally, the firm's sale of hats has been slowing. They are considering closing down the hat division. If they do so, the firm will save $220,000 in fixed overhead by not having to pay the hat manager's salaries. The remainder of the fixed overhead is incurred at the firm level and allocated out to the divisions based on sales. 2. What is the change in net income if the hat division is closed? Put the ABSOLUTE VALUE of the effect in the box below and then select whether it increases or decreases income. Change in Net Income U 3. Katy Perry offers to rent he hat factory for $335,000 per year. What would be the net effect of closing the factory and renting it out to Katy? Put the ABSOLUTE VALUE of the effect in the box below and then select whether it increases or decreases income. Change in Net Income $0 Increase in income. O Decrease in income