Question 4: Solve the following Case (10 marks) Following a strategy of product differentiation, Bright Company makes a high-end Appliance. AP15. Bright Company presents the following data for the years 2016 and 2017: Units of AP15 produced and sold Selling price Direct materials (square feet) Direct materials costs per square foot Manufacturing capacity in units of AP15 Total conversion costs Conversion costs per unit of capacity Selling and customer-service capacity (customers) Total selling and customer-service costs 2016 2017 20,000 21,000 $200 $220 60,000 61,500 $22 25,000 25,000 $1,000,000 $1,100,000 $44 58 $360,000 $362,500 Selling and customer-service capacity cost per customer $6,000 $6,250 $20 $40 60 Bright Company produces no defective units but it wants to reduce direct materials usage per unit of AP15 in 2017. Manufacturing conversion costs in each year depend on production capacity defined in terms of AP15 units that can be produced. Selling and customer-service costs depend on the number of customers that the customer and service functions are designed to support. Bright Company has 46 customers in market size for high-end appliances increased 5% from 2016 to 2017. 2016 and 50 customers in 2017. The industry Required 1) What is operating income for 2016? 2) What is operating income in 2017 3) What is the change in operating income from 2016 to 20177 Page 8 of 10 Given the following aocout information for Leong Corporstion, preparea poeport form for the company as of December 31, 2015. All acounts have nomal balances Interest Expense 2,400 Retained Earnings Dividends 57,320 Bonds Payable Notes Payable (due in 6 months Share Capital-Ordinary Accumulated Depreciation- Equip Prepaid Advertising 10,000 351,400 Buildings Supplies Taxes Payable Utilities Expense Advertising Expense Salaries and Wages Expense Salaries and Wages Payable Accumulated Depr.- Buildings Cash Depreciation Expense 1,860 1,560 15,000 Page 6 of 10