The Gannett Company provides landscaping services to corporations and businesses. All its landscaping work requires Gannett...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The Gannett Company provides landscaping services to corporations and businesses. All its landscaping work requires Gannett to use landscaping equipment. Its landscaping equipment has the capacity to do 13,000 hours of landscaping work. It currently anticipates getting orders that would utilize 11,900 hours of equipment time. Gannett charges $85 per hour for landscaping work. Cost information for the current expected activity level is as follows: E (Click the icon to view the cost information.) Read the requirement. Begin by completing an analysis, and start by showing the computation of the company's contribution margin without the landscaping work from Connor. Next, calculate the contribution margin of the special order. (Calculate the contribution margin for the special order assuming there are no constraints on landscaping hours.) Contribution Margin for Contribution Margin for Existing Landscape Connor Corporation Customers Landscaping Work Revenues Variable costs: Landscaping costs Marketing costs Total variable costs Contribution margin Determine the contribution margin per hour for existing customers. (Enter amounts to the nearest cent.) = Contribution margin per hour for existing customers per hour %3D Determine the contribution margin per hour for Connor's order and then determine whether Gannett should do any landscaping work for Connor Corporation. (Enter amounts to the nearest cent.) = Contribution margin per hour for Connor's order per hour %3D To maximize operating income, Gannett should allocate as much of its capacity to customers who generate the contribution margin per unit of the constraining resource. That is, Gannett should first allocate equipment capacity to and only the balance to Gannett maximizes total contribution margin by allocating hours of equipment capacity to existing customers and to Connor Corporation, for a total contribution margin of $ $ 1,011,500 Revenues ($85 x 11,900 hours) Variable landscaping costs (including materials and labor), which vary with the number of hours worked ($60 per hour x 11,900 hours) 714,000 Fixed landscaping costs 125,000 Variable marketing costs (6% of revenues) 60,690 65,000 Fixed marketing costs 964,690 Total costs 46,810 Operating income Requirement In order to fill its available capacity, Gannett's salespersons are trying to find new business. Russell Corporation wants Gannett to do 4,600 hours of landscaping work for $100 per hour. Variable landscaping costs for the Russell Corporation order are $50 per hour and variable marketing costs are 5% of revenues. Gannett can accept as much or as little of the 4,600 hours of Russell's landscaping work. What should Gannett Corporation do? The Gannett Company provides landscaping services to corporations and businesses. All its landscaping work requires Gannett to use landscaping equipment. Its landscaping equipment has the capacity to do 13,000 hours of landscaping work. It currently anticipates getting orders that would utilize 11,900 hours of equipment time. Gannett charges $85 per hour for landscaping work. Cost information for the current expected activity level is as follows: E (Click the icon to view the cost information.) Read the requirement. Begin by completing an analysis, and start by showing the computation of the company's contribution margin without the landscaping work from Connor. Next, calculate the contribution margin of the special order. (Calculate the contribution margin for the special order assuming there are no constraints on landscaping hours.) Contribution Margin for Contribution Margin for Existing Landscape Connor Corporation Customers Landscaping Work Revenues Variable costs: Landscaping costs Marketing costs Total variable costs Contribution margin Determine the contribution margin per hour for existing customers. (Enter amounts to the nearest cent.) = Contribution margin per hour for existing customers per hour %3D Determine the contribution margin per hour for Connor's order and then determine whether Gannett should do any landscaping work for Connor Corporation. (Enter amounts to the nearest cent.) = Contribution margin per hour for Connor's order per hour %3D To maximize operating income, Gannett should allocate as much of its capacity to customers who generate the contribution margin per unit of the constraining resource. That is, Gannett should first allocate equipment capacity to and only the balance to Gannett maximizes total contribution margin by allocating hours of equipment capacity to existing customers and to Connor Corporation, for a total contribution margin of $ $ 1,011,500 Revenues ($85 x 11,900 hours) Variable landscaping costs (including materials and labor), which vary with the number of hours worked ($60 per hour x 11,900 hours) 714,000 Fixed landscaping costs 125,000 Variable marketing costs (6% of revenues) 60,690 65,000 Fixed marketing costs 964,690 Total costs 46,810 Operating income Requirement In order to fill its available capacity, Gannett's salespersons are trying to find new business. Russell Corporation wants Gannett to do 4,600 hours of landscaping work for $100 per hour. Variable landscaping costs for the Russell Corporation order are $50 per hour and variable marketing costs are 5% of revenues. Gannett can accept as much or as little of the 4,600 hours of Russell's landscaping work. What should Gannett Corporation do? The Gannett Company provides landscaping services to corporations and businesses. All its landscaping work requires Gannett to use landscaping equipment. Its landscaping equipment has the capacity to do 13,000 hours of landscaping work. It currently anticipates getting orders that would utilize 11,900 hours of equipment time. Gannett charges $85 per hour for landscaping work. Cost information for the current expected activity level is as follows: E (Click the icon to view the cost information.) Read the requirement. Begin by completing an analysis, and start by showing the computation of the company's contribution margin without the landscaping work from Connor. Next, calculate the contribution margin of the special order. (Calculate the contribution margin for the special order assuming there are no constraints on landscaping hours.) Contribution Margin for Contribution Margin for Existing Landscape Connor Corporation Customers Landscaping Work Revenues Variable costs: Landscaping costs Marketing costs Total variable costs Contribution margin Determine the contribution margin per hour for existing customers. (Enter amounts to the nearest cent.) = Contribution margin per hour for existing customers per hour %3D Determine the contribution margin per hour for Connor's order and then determine whether Gannett should do any landscaping work for Connor Corporation. (Enter amounts to the nearest cent.) = Contribution margin per hour for Connor's order per hour %3D To maximize operating income, Gannett should allocate as much of its capacity to customers who generate the contribution margin per unit of the constraining resource. That is, Gannett should first allocate equipment capacity to and only the balance to Gannett maximizes total contribution margin by allocating hours of equipment capacity to existing customers and to Connor Corporation, for a total contribution margin of $ $ 1,011,500 Revenues ($85 x 11,900 hours) Variable landscaping costs (including materials and labor), which vary with the number of hours worked ($60 per hour x 11,900 hours) 714,000 Fixed landscaping costs 125,000 Variable marketing costs (6% of revenues) 60,690 65,000 Fixed marketing costs 964,690 Total costs 46,810 Operating income Requirement In order to fill its available capacity, Gannett's salespersons are trying to find new business. Russell Corporation wants Gannett to do 4,600 hours of landscaping work for $100 per hour. Variable landscaping costs for the Russell Corporation order are $50 per hour and variable marketing costs are 5% of revenues. Gannett can accept as much or as little of the 4,600 hours of Russell's landscaping work. What should Gannett Corporation do? The Gannett Company provides landscaping services to corporations and businesses. All its landscaping work requires Gannett to use landscaping equipment. Its landscaping equipment has the capacity to do 13,000 hours of landscaping work. It currently anticipates getting orders that would utilize 11,900 hours of equipment time. Gannett charges $85 per hour for landscaping work. Cost information for the current expected activity level is as follows: E (Click the icon to view the cost information.) Read the requirement. Begin by completing an analysis, and start by showing the computation of the company's contribution margin without the landscaping work from Connor. Next, calculate the contribution margin of the special order. (Calculate the contribution margin for the special order assuming there are no constraints on landscaping hours.) Contribution Margin for Contribution Margin for Existing Landscape Connor Corporation Customers Landscaping Work Revenues Variable costs: Landscaping costs Marketing costs Total variable costs Contribution margin Determine the contribution margin per hour for existing customers. (Enter amounts to the nearest cent.) = Contribution margin per hour for existing customers per hour %3D Determine the contribution margin per hour for Connor's order and then determine whether Gannett should do any landscaping work for Connor Corporation. (Enter amounts to the nearest cent.) = Contribution margin per hour for Connor's order per hour %3D To maximize operating income, Gannett should allocate as much of its capacity to customers who generate the contribution margin per unit of the constraining resource. That is, Gannett should first allocate equipment capacity to and only the balance to Gannett maximizes total contribution margin by allocating hours of equipment capacity to existing customers and to Connor Corporation, for a total contribution margin of $ $ 1,011,500 Revenues ($85 x 11,900 hours) Variable landscaping costs (including materials and labor), which vary with the number of hours worked ($60 per hour x 11,900 hours) 714,000 Fixed landscaping costs 125,000 Variable marketing costs (6% of revenues) 60,690 65,000 Fixed marketing costs 964,690 Total costs 46,810 Operating income Requirement In order to fill its available capacity, Gannett's salespersons are trying to find new business. Russell Corporation wants Gannett to do 4,600 hours of landscaping work for $100 per hour. Variable landscaping costs for the Russell Corporation order are $50 per hour and variable marketing costs are 5% of revenues. Gannett can accept as much or as little of the 4,600 hours of Russell's landscaping work. What should Gannett Corporation do? The Gannett Company provides landscaping services to corporations and businesses. All its landscaping work requires Gannett to use landscaping equipment. Its landscaping equipment has the capacity to do 13,000 hours of landscaping work. It currently anticipates getting orders that would utilize 11,900 hours of equipment time. Gannett charges $85 per hour for landscaping work. Cost information for the current expected activity level is as follows: E (Click the icon to view the cost information.) Read the requirement. Begin by completing an analysis, and start by showing the computation of the company's contribution margin without the landscaping work from Connor. Next, calculate the contribution margin of the special order. (Calculate the contribution margin for the special order assuming there are no constraints on landscaping hours.) Contribution Margin for Contribution Margin for Existing Landscape Connor Corporation Customers Landscaping Work Revenues Variable costs: Landscaping costs Marketing costs Total variable costs Contribution margin Determine the contribution margin per hour for existing customers. (Enter amounts to the nearest cent.) = Contribution margin per hour for existing customers per hour %3D Determine the contribution margin per hour for Connor's order and then determine whether Gannett should do any landscaping work for Connor Corporation. (Enter amounts to the nearest cent.) = Contribution margin per hour for Connor's order per hour %3D To maximize operating income, Gannett should allocate as much of its capacity to customers who generate the contribution margin per unit of the constraining resource. That is, Gannett should first allocate equipment capacity to and only the balance to Gannett maximizes total contribution margin by allocating hours of equipment capacity to existing customers and to Connor Corporation, for a total contribution margin of $ $ 1,011,500 Revenues ($85 x 11,900 hours) Variable landscaping costs (including materials and labor), which vary with the number of hours worked ($60 per hour x 11,900 hours) 714,000 Fixed landscaping costs 125,000 Variable marketing costs (6% of revenues) 60,690 65,000 Fixed marketing costs 964,690 Total costs 46,810 Operating income Requirement In order to fill its available capacity, Gannett's salespersons are trying to find new business. Russell Corporation wants Gannett to do 4,600 hours of landscaping work for $100 per hour. Variable landscaping costs for the Russell Corporation order are $50 per hour and variable marketing costs are 5% of revenues. Gannett can accept as much or as little of the 4,600 hours of Russell's landscaping work. What should Gannett Corporation do? The Gannett Company provides landscaping services to corporations and businesses. All its landscaping work requires Gannett to use landscaping equipment. Its landscaping equipment has the capacity to do 13,000 hours of landscaping work. It currently anticipates getting orders that would utilize 11,900 hours of equipment time. Gannett charges $85 per hour for landscaping work. Cost information for the current expected activity level is as follows: E (Click the icon to view the cost information.) Read the requirement. Begin by completing an analysis, and start by showing the computation of the company's contribution margin without the landscaping work from Connor. Next, calculate the contribution margin of the special order. (Calculate the contribution margin for the special order assuming there are no constraints on landscaping hours.) Contribution Margin for Contribution Margin for Existing Landscape Connor Corporation Customers Landscaping Work Revenues Variable costs: Landscaping costs Marketing costs Total variable costs Contribution margin Determine the contribution margin per hour for existing customers. (Enter amounts to the nearest cent.) = Contribution margin per hour for existing customers per hour %3D Determine the contribution margin per hour for Connor's order and then determine whether Gannett should do any landscaping work for Connor Corporation. (Enter amounts to the nearest cent.) = Contribution margin per hour for Connor's order per hour %3D To maximize operating income, Gannett should allocate as much of its capacity to customers who generate the contribution margin per unit of the constraining resource. That is, Gannett should first allocate equipment capacity to and only the balance to Gannett maximizes total contribution margin by allocating hours of equipment capacity to existing customers and to Connor Corporation, for a total contribution margin of $ $ 1,011,500 Revenues ($85 x 11,900 hours) Variable landscaping costs (including materials and labor), which vary with the number of hours worked ($60 per hour x 11,900 hours) 714,000 Fixed landscaping costs 125,000 Variable marketing costs (6% of revenues) 60,690 65,000 Fixed marketing costs 964,690 Total costs 46,810 Operating income Requirement In order to fill its available capacity, Gannett's salespersons are trying to find new business. Russell Corporation wants Gannett to do 4,600 hours of landscaping work for $100 per hour. Variable landscaping costs for the Russell Corporation order are $50 per hour and variable marketing costs are 5% of revenues. Gannett can accept as much or as little of the 4,600 hours of Russell's landscaping work. What should Gannett Corporation do?
Expert Answer:
Answer rating: 100% (QA)
A Contribution Margin For Existing Landscape Customers Contribution Margin For Connor Corporation La... View the full answer
Posted Date:
Students also viewed these accounting questions
-
Assuming there are no accidents or delays, the distance that a car travels down the interstate can be calculated with the following formula: Distance = Speed Time Create a VB application that allows...
-
All Eyes Security Services Company provides security monitoring services. It employs four security specialists. Each specialist works an average of 180 hours a month. The companys controller has...
-
Special order with no spare capacity Crystal Lattice produces exercise mats for use in fitness centres. Production capacity is 20 000 mats per year. Due to a chain of fitness centres closing, Crystal...
-
Would you ever expect to find a tumor-inducing retrovirus that carried a processed cellular tumor suppressor gene in its genome?
-
Vaughn Inc. has decided to purchase equipment from Central Michigan Industries on January 2, 2014, to expand its production capacity to meet customers demand for its product. Vaughn issues an...
-
Berta Industries stock has a beta of 1.25. The company just paid a dividend of $.40, and the dividends are expected to grow at 5 percent. The expected return on the market is 12 percent, and Treasury...
-
Using multiple regression The Sure-Built Housing Company manufactures modular homes and uses a multiple regression model to predict monthly housing sales units for its nationwide operations. The...
-
Mama Leones Frozen Pizzas uses 50,000 units of cheese per year. Each unit costs $2.50. The ordering cost for the cheese is $250 per order, and its carrying cost is $0.50 per unit per year. Calculate...
-
The function f is defined by f (x) = -2x3 - x + 1 and the point (1, -2) is on the graph of f. If g(a) = f (x), what is the value of g'( -2)
-
Dominique Fouque owns and operates Dominique's Doll House. She has a small shop in which she sells new and antique dolls. She is particularly well known for her collection of antique Ken and Barbie...
-
In the following discussion, present the general principles and/or typical guidelines that a human resource professional should follow in both structuring and staffing an HR department that serves...
-
Complete the following template, including all parts. Fill out all cells using complete sentences, aiming for one to three complete sentences for each cell of the template. PART 1: TOPIC Purpose What...
-
(b) Ntow Ltd prepared the following estimated figures for its Manufacturing Division for the four months ending 31st March 2019: Month Production in units Cost () January 14,000 220,000 February...
-
What strategies can organizations implement to encourage concise communication among employees, and how might these practices contribute to increased efficiency and productivity in corporate settings...
-
The Abraham Company produces three products - product A, Product B and Product C. Product A and B are the joint products. Product C has a relatively small market value and is therefore treated as a...
-
Differentiate and factor/simplify as much as possible. )f(x) = sinx- COSX-x
-
Which of the following is characteristic of an obsessive passion? Question 9 options: You do it because you love it. Your goal is to learn and grow. You do it to "win" or not to lose. Your passion is
-
A local politician is concerned that a program for the homeless in her city is discriminating against blacks and other minorities. The following data were taken from a random sample of black and...
-
When serial bonds are issued a. the bonds all come due on the same date. b. not all of the bonds come due on the same date. c. the interest is paid as a series of monthly payments. d. the lender is...
-
What is the proper accounting and reporting of bonds payable. (See pp. 482484.)
-
What are the components of the long-term liability of the balance sheet? (See pp. 480481.)
Study smarter with the SolutionInn App