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The Crestone Company provides landscaping services to corporations and businesses. All its landscaping work requires Crestone to use landscaping equipment. Its landscaping equipment has

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The Crestone Company provides landscaping services to corporations and businesses. All its landscaping work requires Crestone to use landscaping equipment. Its landscaping equipment has the capacity to do 12,000 hours of landscaping work. It is currently utilizing 10,500 hours of equipment time. Crestone charges $110 per hour for landscaping work. Cost information for the current activity level is as follows: (Click the loon to view the cost information.) Read the requirement. Begin by determining the change in operating income if Crestone accepts the special order. (If an input field is not used in the table, leave the input field 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 Revenues ($110 x 10,500 hours) $ 1,155,000 Variable landscaping costs (largely labor), which vary with the number of hours worked ($75 per hour x 10,500 hours) 787,500 105,000 Requirement Crestone has just received a one-time only special order for landscaping work from Noran Corporation at $50 per hour that would require 1,500 hours of equipment time. No marketing costs will be necessary for the one-time only special order. Should Crestone accept the offer even though revenue per hour is less than Crestone's landscaping cost of $85 per hour [($787,500 + $105,000) + 10,500 hours)]. Fixed landscaping costs Variable marketing costs (6% of revenues) Fixed marketing costs Total costs Operating income Print Done Print Done 69,300 70,000 1,031,800 $ 123,200 -

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