Rodeo Printers operates a printing press with a monthly capacity of 3,000 machine-hours. Rodeo has two main customers: Wallace Corporation and Jessica Corporation. Data on each customer for January are: 3 (Click to view the data.) (Click the icon to view the special order information.) Read the requirements. Begin by calculating the amount that should be used to determine the allocation. Wallace Corporation Jessica Corporation Variable cost per machine-hour 16 | 75 Since the contribution margin of Jessica is greater than the contribution margin per machine-hour of Wallace, to maximize operating income Rodeo should first allocate the capacity needed to take all of the Wallace Corpora mergin per machine hour or Wallace, to maximize operating income Rodes should first alocate the capacity neded to take all ofthe (Wallacel corpo business and then allocate the remaining to Jessica Corporation. Now calculate the operating income using the allocation you determined above. Wallace Corporation Jessica Corporation Total Revenue per machine-hour x Machine-hours to be worked Contribution margin Fixed costs 140000 Operating income What other factors should Rodeo consider before making a decision? (Select all that apply.) A. If Rodeo sees long-run benefit in working with the company that provides the least profit, then Rodeo must also look for ways to increase the profitability of the business it does with that company. B. Will both corporations continue to demand the same level of business going forward? C. Will turning down the business of one company affect customer satisfaction? OD. If Rodeo sees long-run benefit in working with the company that provides the greatest profit, then Rodeo does not need to be concerned about turning down the business of the other company. E. Choosing customers is a strategic decision that should primarily involve the analysis of the short-term effects of making a decision. OF. If Rodeo turns down one of the company's business, will that company continue to place orders with Rodeo or seek alternative suppliers? i Data Table Total Revenues Wallace Corporation Jessica Corporation 157,500 $ 105,000 $ 36,000 56,250 262,500 92,250 Variable costs Contribution margin 121,500 84,000 Fixed costs (allocated) 48,750 56,000 (7,250) $ 170,250 140,000 30,250 37,500 $ Operating income Machine-hours required 2,250 hours 750 hours 3,000 hours More Info Jessica Corporation indicates that it wants Rodeo to do an additional $105,000 worth of printing jobs during February. These jobs are identical to the existing business Rodeo did for Jessica in January in terms of variable costs and machine-hours required. Rodeo anticipates that the business from Wallace Corporation in February will be the same as that in January. Rodeo can choose to accept as much of the Wallace and Jessica business for February as its capacity allows. Assume that total machine-hours and fixed costs for February will be the same as in January