Cost Accounting - Special Order Decisions

Please help answer the (2) blanks with shown work. Thanks Kindly!

Example: Ellis Company makes boxed stationery and has capacity for 100,000 boxes. Currently, Ellis is producing 80,000 boxes. Information on price and costs is as follows:

Round intermediate calculations to the nearest cent. Use rounded answers in subsequent computations, if required.

Price	$2.48
Direct materials	$0.77
Direct labor	0.74
Variable overhead	0.17
Fixed overhead*	1.10
*Fixed overhead is based on capacity of 100,000 boxes.

A gift store chain recently came to Ellis Company and asked to have 10,400 boxes of stationery printed at a price of $1.92 per box. If Ellis Company accepts the special order, operating income will be $ **BLANK** higher

Now suppose that the gift store chain requires that a special imprinted seal must be put on each box. Direct materials will increase by $0.07 per box and Ellis can rent the machinery to imprint the seals for $2,149. If Ellis Company accepts the special order with this new requirement, operating income will be $ **BLANK** lower