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 13,500 hours of landscaping work. It currently anticipates getting orders that would utilize 12,000 hours of equipment time from existing customers. Crestone charges $100 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 Crestone 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 Data table Revenues ($100 x 12,000 hours) $ 1,200,000 Variable landscaping costs (largely labor), which vary with the number of hours worked ($65 per hour * 12,000 hours) 780,000 Fixed landscaping costs 96,000 Variable marketing costs (3% of revenues) Fixed marketing costs Total costs Operating income 36,000 65,000 977,000 $ 223,000 Requirement Crestone has received an order for landscaping work from Nancy Corporation at $50 per hour that would require 2,200 hours of equipment time. Variable landscaping costs for the Nancy Corporation order are $65 per hour and variable marketing costs are 3% of revenues. Crestone can either accept the Nancy offer in whole or reject it. Should Crestone accept the offer? Print Done