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Save The Everest Company provides landscaping services to corporations and businesses. All its landscaping work requires Everest to use landscaping equipment. Its landscaping equipment has
Save The Everest Company provides landscaping services to corporations and businesses. All its landscaping work requires Everest to use landscaping equipment. Its landscaping equipment has the capacity to do 14,500 hours of landscaping work. It currently anticipates getting orders that would utilize 13,100 hours of equipment time from existing customers. Everest charges $105 per hour for landscaping work. Cost information for the current expected activity level is as follows: (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 operating income without the special order. Next, calculate operating income with the special order, and then determine whether Everest should accept or reject the special order. Without One-Time Only Special Order Relevant revenues Relevant variable costs Landscaping costs Marketing costs Total relevant costs Relevant operating income i Etext pages Calculator vides landscaping services to corporations and businesses. All its landscaping work requires Everest to use landscaping the capacity to do 14,500 hours of landscaping work. It currently anticipates getting orders that would utilize 13,100 hc rs. Everest charges $105 per hour for landscaping work. Cost information for the current expected activity level is as foll the cost information.) - alysis then Requirement Everest has received an order for landscaping work from Bonnie Corporation at $68 per hour that would require 2,300 hours of equipment time. Variable landscaping costs for the Bonnie Corporation order are $60 per hour and variable marketing costs are 6% of revenues. Everest can either accept the Bonnie offer in whole or reject it. Should Everest accept the offer? xt, calculate Print Done tom view Data table an a and ts: S com Revenues ($105 x 13,100 hours) Variable landscaping costs (including materials and labor), which vary with the number of hours worked ($60 per hour x 13,100 hours) Fixed landscaping costs Variable marketing costs (6% of revenues) Fixed marketing costs Total costs Operating income Print Done - X s follow $ 1,375,500 786,000 culate o 140,000 82,530 74,000 1,082,530 $ 292,970
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