Tom's Trophies makes trophies and medals for mass events, such as Sk races and marathons. The costs for making trophies are: Direct materials and labor .50 per medal Set-up costs per order (per race) $2,000 Fixed manufacturing costs per year $200,000 Variable marketing costs $500 per race Our plant has the capacity to make 5,000 medals/ week, or 250,000 medals per year. The last few years we have made approximately 200,000 medals per year. Our pricing is typically $5.00 / medal for small orders (under 1,000 medals per race) and $3.00 / medal for big orders (over 10,000 medals per race). Do A. or B. If you do both, only B. will be graded. A. 18 points For 2018 we have been approached by the Disney Marathon (40,000 entrants and thus 40,000 medals) asking if we would sell them 40,000 medals at $1.50 each. Since Disney approached us, there would be no marketing costs. If we take the order, what is the change in our profitability? increase / decrease (circle one). $ B. 22 points Suppose it is now 2020, and our business has grown to 240,000 medals sold/year. Our capacity has not changed. If we take the order Disney order (40,000 medals at $1.50 each), we would have to turn down the Music City Marathon, which buys 20,000 medals / year @ $3.00 each. Since Disney approached us, there would be no marketing costs. If we take on the Disney Marathon, and drop the Music City Marathon, what is the change in profitability? $ increase / decrease (circle one).