D PECIAL ORDERS th of the following 4 questions are independent of each other a) The Lantern Corporation has 1,000 obsolete lanterns that are carried in Inventory at a manufacturing cost of $20,000. If the lanterns are re machined, they could be sold for $9.000. Alternatively, the lanterns could be sold for scrap for $1,000 Quantity of obsolete lanterns 1,000 Manufacturing cost of obsolete lanterns S 20,000 Cost to re machine the obsolete lanterns $ 5,100 Re- machined lanterns could be sold for $ 9,000 Obsolete lanterns, if not re-machined, could be sold for $ 1.000 Regled Which alternative (scrap or re-machine) is more desirable, and what are the total relevant costs for that alternative? More desirable alternative re-machine Relevant costs of more desirable alternative (2) Relay Corporation manufactures batons. At full capacity, Relay can manufacture 300.000 batons a year at a variable cost of $750,000 and a fixed cost of $450,000. Based on Relay's predictions for next year, 240,000 batons will be sold at the regular price Ruted each as indicated below. In addition, a special order was placed for 60,000 batons to be sold at a 40% specified discount off the regular price. Totalfixed costs would be unaffected by this order. $ $ Quantity of batons at full capacity Total variable manufacturing cost of batons at full capacity Total fixed manufacturing cost of batons at full capacity Quantity of batons to be sold at regular price next year Regular selling price of batons Quantity of batons to be sold at special order price next year Discount off the regular price for special order 300.000 750,000 450,000 240.000 4.50 60,000 LON $ 20 27 30 Regulad Bly what amount would the company's operating Income be increased or decreased) as a result of the special onder