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Q4 6 Points Ontario Corp. provides landscaping services to Hotels and Conference centers. All its landscaping work requires using specialized equipment and Ontario Corp has
Q4 6 Points Ontario Corp. provides landscaping services to Hotels and Conference centers. All its landscaping work requires using specialized equipment and Ontario Corp has the capacity to provide 12,000 hours of landscaping work per month. It currently has contracts for 11,000 hours and it charges $90 per hour for landscaping work. Cost information for the current activity level is as follows: Revenues: 90 X 11,000 = $990,000 Variable cost per hour: $60 Fixed costs: $88,0000 Variable marketing costs: 4% of revenues Fixed marketing costs: $68,000 Q4.1 2 Points (a) Calculate total costs if Ontario Corp. provides 11,000 hours. (b) What is the operating income? Clearly show your work Enter your answer here Q4.2 2 Points Ontario Corp just received a one-time only special order for landscaping work from Alberta Inc. This order requires 500 hours and Alberta Inc is willing to pay $65 per hour. Assume no marketing costs will be necessary for the one-time only special order. Should Ontario Corp accept the order? Clearly show your work Enter your answer here Please select file(s) Select file(s) Save Answer Q4.3 2 Points Assume instead that the order from Alberta Inc. is not a one-time special. Meaning, Alberta Inc. will require 500 hours every month for which Alberta Inc. is willing to pay $65 per hour. Should Ontario Corp accept the order? Clearly show your work Enter your answer here
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