LingYu Ltd. produces jewelry boxes for retail customers such as Walmart. One of their most popular...

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LingYu Ltd. produces jewelry boxes for retail customers such as Walmart. One of their most popular products has the following selling price and costs: Dollar value Description per unit Selling price Direct materials Direct labour Variable overhead Fixed overhead Sales commission Income per unit $40.00 $8.00 $7.20 $6.40 $5.60 $2.00 $10.80 The company, due to the impact of a world-wide pandemic, is not at capacity. They also have some non-manufacturing fixed costs (such as sales and administration costs). They have provided the following details: Capacity (units) Production (units) Fixed non-manufacturing costs (annual) $86,400 Kendell Ltd., who has not bought from LingYu Ltd. before, has offered to buy jewelry boxes for a special event that Kendell is managing. Kendell Ltd. is from a geographic region outside the area normally serviced by LingYu Ltd. Kendell Ltd. has agreed to pay the transportation costs. In addition, because no sales person was involved, there will be no sales commission paid on this sale. 40,000 32,000 Other details of Kendell's offer are as follows: Total units required Purchase price por unit Transportation costs/unit 6,000 $28.00 $1.30 If LingYu Ltd. accepts this order, will operating income increase, decrease or stay the same? a) Increase b) Stay the same O c) Decrease Question 20 (3 points) By how much will operating income change if the order is accepted? Enter your answer as a positive number. Question 21 (1 point) Assume, INSTEAD, that the order from Kendell Ltd. was obtained through a sales person so sales commission has to be paid, In addition, Kendell Ltd. has asked LingYu Ltd. to pay all transportation costs. Given this new information, will LingYu's operating income increase, decrease or stay the same? a) Decrease b) Increase Question 22 (2 points) Given this new information, by how much will operating income change if the order was accepted now? Enter your answer as a positive number. Question 23 (3 points) What qualitative factors support accepting the order from Kendell Ltd.? Choose all that apply. O a) Reduce need to lay off employees. b) Increase the company's brand awareness in the current geographical region. OC) May have a negative impact on regular business. d) Improve employee moral. e) Reduction in idle capacity. LingYu Ltd. produces jewelry boxes for retail customers such as Walmart. One of their most popular products has the following selling price and costs: Dollar value Description per unit Selling price Direct materials Direct labour Variable overhead Fixed overhead Sales commission Income per unit $40.00 $8.00 $7.20 $6.40 $5.60 $2.00 $10.80 The company, due to the impact of a world-wide pandemic, is not at capacity. They also have some non-manufacturing fixed costs (such as sales and administration costs). They have provided the following details: Capacity (units) Production (units) Fixed non-manufacturing costs (annual) $86,400 Kendell Ltd., who has not bought from LingYu Ltd. before, has offered to buy jewelry boxes for a special event that Kendell is managing. Kendell Ltd. is from a geographic region outside the area normally serviced by LingYu Ltd. Kendell Ltd. has agreed to pay the transportation costs. In addition, because no sales person was involved, there will be no sales commission paid on this sale. 40,000 32,000 Other details of Kendell's offer are as follows: Total units required Purchase price por unit Transportation costs/unit 6,000 $28.00 $1.30 If LingYu Ltd. accepts this order, will operating income increase, decrease or stay the same? a) Increase b) Stay the same O c) Decrease Question 20 (3 points) By how much will operating income change if the order is accepted? Enter your answer as a positive number. Question 21 (1 point) Assume, INSTEAD, that the order from Kendell Ltd. was obtained through a sales person so sales commission has to be paid, In addition, Kendell Ltd. has asked LingYu Ltd. to pay all transportation costs. Given this new information, will LingYu's operating income increase, decrease or stay the same? a) Decrease b) Increase Question 22 (2 points) Given this new information, by how much will operating income change if the order was accepted now? Enter your answer as a positive number. Question 23 (3 points) What qualitative factors support accepting the order from Kendell Ltd.? Choose all that apply. O a) Reduce need to lay off employees. b) Increase the company's brand awareness in the current geographical region. OC) May have a negative impact on regular business. d) Improve employee moral. e) Reduction in idle capacity.