Answer Happy

SooYun Ltd. produces jewelry boxes for retail customers such as Walmart. One of their most popular products has the following selling price and costs: Description Dollar value per unit Selling price $55.00 Direct materials $11.00 Direct labour $9.90 Variable overhead $8.80 Fixed overhead $7.70 Sales commission $2.75 Income per unit $14.85 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) 35,000 Production (units) 28,000 Fixed non-manufacturing costs annual) $103,950 Tmax Ltd., who has not bought from SooYun Ltd. before, has offered to buy jewelry boxes for a special event that Tmax is managing. Tmax Ltd. is from a geographic region outside the area normally serviced by SooYun Ltd. Tmax 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. Other details of Tmax's offer are as follows: Total units required 5,250 Purchase price per unit $35.00 Transportation costs / unit $1.25 Use the above information to answer the following questions.
Question 1 (1 point) If SooYun Ltd. accepts this order, will operating income increase, decrease or stay the same? a) Increase b) Stay the same c) Decrease Question 2 (3 points) By how much will operating income change if the order is accepted? Enter your answer as a positive number. Question 3 (1 point) Assume, INSTEAD, that the order from Tmax Ltd. was obtained through a sales person so sales commission has to be paid. In addition, Tmax Ltd. has asked SooYun Ltd. to pay all transportation costs. Given this new information, will SooYun's operating income increase, decrease or stay the same? a) Increase b) Stay the same c) Decrease Question 4 (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 4 (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. A/ Question 5 (3 points) What qualitative factors support accepting the order from Tmax Ltd.? Choose all that apply. a) Improve employee moral. b) Reduce need to lay off employees. c) Increase the company's brand awareness in the current geographical region. d) Reduction in idle capacity. e) May have a negative impact on regular business.