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 $54 per dress. The firm has the following information: Units Sold Selling Price per Unit Variable Cost per Unit Fixed Cost per Unit Dresses 16,000 $62 $16 $34 Eyeglasses 40,000 $33 $12 $9 Hats 22,000 $46 $23 $21 The firm expects that taking the special order will result in the loss of the sale of 260 hats at 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 Effects o 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 $ o O Increase in income. Decrease in income. Click to select your answer(s). FullSizeRender.jpeg w Chapter 25-2.docx w Chapter 24-2.docx PDF 23.pdf PDF 22.pdf Show all Type here to search 12:22 PM 4/30/2020