The Medals 'R' Us Company manufactures medals for winners of athletic events and other contests. Its manufacturing plant has the capacity to produce 9,800 medals each month; current production and sales are 8,000 medals per month. The company normally charges $225 per medal. Cost information for the current activity level is provided in the accompanying table. (Click the icon to view the cost information.) Medals 'R' Us has just received a special one-time-only order for 1,600 medals at $195 per medal. Accepting the special order would not affect the company's regular business. Medals 'R' Us makes medals for its existing customers in batch sizes of 40 medals (200 batches x 40 medals per batch = 8,000 medals). The special order requires Medals 'R' Us to make the medals in 20 batches of 80 each. Required Requirement 1. Should Medals 'R' Us accept this special order? Explain briefly. First calculate the operating income without the one-time special order, next calculate the operating income with the one-time special order, and then find the difference. (Round your answers to the nearest whole dollar. Use parentheses or a minus sign for negative amounts or operating losses. For differences that are $0, make sure to enter "0" in the appropriate cell.) Sales Variable costs: Direct materials Direct manufacturing labour Batch variable costs Fixed costs: Fixed manufacturing costs Fixed marketing costs Total costs Operating income Without special order With special order Difference (1) (2) (2)-(1) Cost information Variable costs (vary with units produced): Direct materials 328,000 Direct labour 352,000 Variable costs (vary with number of batches): 128,000* Setups, materials handling, quality control Fixed manufacturing costs 315,000 222,000 Fixed marketing costs $ 1,345,000 Total costs *Costs of $128,000 are based on 200 batches at $640 per batch. - Medals 'R' Us accept the order because accepting the order | the operating income by $ Requirement 2. Suppose plant capacity was only 8,600 medals instead of 9,800 medals each month. The special order must either be taken in full or rejected totally. Should Medals 'R' Us accept the special order? Calculate the operating income with the one-time special order and the reduced plant capacity. (Round your answers to the nearest whole dollar. Use parentheses or a minus sign for negative amounts or operating losses.) With special order Sales Variable costs: Direct materials Direct manufacturing labour Batch variable costs Fixed costs: Fixed manufacturing costs Fixed marketing costs Total costs Operating income Complete the sentence below. (Round your answer to the nearest whole dollar. Enter a positive amount only.) Medals 'R' Us accept the order because accepting the order the operating income by $ Requirement 3. As in requirement 1, assume that monthly capacity is 9,800 medals. Medals 'R' Us is concerned that if it accepts the special order, its existing customers will immediately demand a price discount of $13 in the month in which the special order is being filled. They would argue that Medals 'R' Us's capacity costs are now being spread over more units and that existing customers should get the benefit of these lower costs. Should Medals 'R' Us accept the special order under these conditions? (Round your answers to the nearest whole dollar. Use parentheses or a minus sign for negative amounts or an operating loss.) Requirement 3. As in requirement 1, assume that monthly capacity is 9,800 medals. Medals 'R' Us is concerned that if it accepts the special order, its existing customers will immediately demand a price discount of $13 in the month in which the special order is being filled. They would argue that Medals 'R' Us's capacity costs are now being spread over more units and that existing customers should get the benefit of these lower costs. Should Medals 'R' Us accept the special order under these conditions? (Round your answers to the nearest whole dollar. Use parentheses or a minus sign for negative amounts or an operating loss.) Increase (decrease) in operating income with special order Operating income lost from existing customers Net operating income increase (decrease) on accepting special order Complete the sentence below. (Round your answer to the nearest whole dollar. Enter a positive amount only.) Medals 'R' Us accept the order under these conditions because accepting the order the operating income by $