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Childs Play has been approached by the government, which is seeking to buy 75,000 rattles for its day care centers in 2024. The proposed government contract states that the government would pay Childs Play a price of $9.00 per rattle. If Childs Play decides to accept this special order, they would avoid packaging costs for this contract as well as all variable selling and administrative costs. The companys capacity is limited to only 150,000 units. If they accept the government contract, they will need to increase their capacity by renting an additional machine. Refer to the "Instructions" tab for the companys estimated cost data and additional machine rental cost.
	# of Rattles Needed by Gov.			75,000
	Sales Price Paid by Gov.			$ 9.00	per rattle
	Increase in fixed costs from additional machine		$ 20,000	per machine
Assume that Childs Play does not adopt the proposed Marketing Plan and that the companys production and sales level without the government contract is expected to be 100,000 rattles for 2024.
1. What is the increase or (decrease) in Net Income that Childs Play would recognize if they accept this special order?
2. Based on your above analysis, should Childs Play accept or reject the government contract?

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