%) T111-2 (similar to) Question Help 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 12,000 hours of landscaping work. It currently anticipates getting orders that would utilize 11,500 hours of equipment time from existing customers. Rainier charges $110 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 Foraker should accept or reject the special order. Without One-Time Only Special Order With One-Time Only Special Order 1,265,000 Relevant revenues Relevant variable costs: 632,500 75,900 708,400 556,600 Landscaping costs Marketing costs Total relevant costs Relevant operating income 1 Requirement Foraker has received an order for landscaping work from Nancy Corporation at $50 per hour that would require 2,800 hours of equipment time. Variable landscaping costs for the Nancy Corporation order are $55 per hour and variable marketing costs are 6% of revenues. Foraker can either accept the Nancy offer in whole or reject it. Should Foraker accept the offer? Data Table Revenues ($110 x 11,500 hours) Variable landscaping costs (including materials and labor), which vary 1,265,000 632,500 with the number of hours worked ($55 per hour x 11,500 hours) Fixed landscaping costs Variable marketing costs (6% of revenues) Fixed marketing costs Total costs Operating income 96,000 75,900 65,000 869,400 395,600 PrintDone