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Please do all the requirements clearly, with clear handwritten. The Foraker Company provides landscaping services to corporations and businesses. All its landscaping work requires Foraker
Please do all the requirements clearly, with clear handwritten.
The Foraker Company provides landscaping services to corporations and businesses. All its landscaping work requires Foraker to use landscaping equipment. Its landscaping equipment has the capacity to do 10,500 hours of landscaping work. It is currently utilizing 9,500 hours of equipment time. Foraker charges $95 per hour for landscaping work. Cost information for the current activity level is as follows: (Click the icon to view the cost information.) Read the requirement. Begin by determining the change in operating income if Foraker accepts the special order. (If a box is not used in the table, leave the box empty; do not select a label or enter a zero. Use parentheses or a minus sign to enter a decrease in operating income.) Less: Increase (decrease) in operating income by accepting the one-time special order Data table 902,500 665,000 Revenues ($95 x 9,500 hours) Variable landscaping costs (including materials and labor), which vary with the number of hours worked ($70 per hour x 9,500 hours) Fixed landscaping costs Variable marketing costs (5% of revenues) Fixed marketing costs 95,000 45,125 67,000 872,125 Total costs $ 30,375 Operating income - Requirement Foraker has just received a one-time only special order for landscaping work from Brood Corporation at $55 per hour that would require 1,000 hours of equipment time. Should Foraker accept the offer even though revenue per hour is less than Foraker's landscaping cost of $80 per hour [($665,000 + $95,000) / 9,500 hours)]. No marketing costs will be necessary for the one-time only special orderStep by Step Solution
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