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hild's Play has been approached by the government, which is seeking to buy 75,000 rattles...

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Accounting

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hild's Play has been approached by the government, which is seeking to buy 75,000 rattles for its day care centers in 024. The proposed government contract states that the government would pay Child's Play a price of $9.00 per rattle. If hild's Play decides to accept this special order, they would avoid packaging costs for this contract as well as all variable elling and administrative costs. The company's capacity. is limited to only: 150,000 units. If they accept the government ontract, they will need to increase their capacity by renting an additional machine. Refer to the "Instructions" tab for the ompany's estimated cost data and additional machine rental cost. Assume that Child's. Play does not adopt the proposed Marketing Plan and that the company's 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 Child's Play would recognize if they accept this special order? 2. Based on your above analysis, should Child's Play accept or reject the government contract

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