The Denali Company provides landscaping services to corporations and businesses. All its landscaping work requires Denali to use landscaping equipment. Its landscaping equipment has the capacity to do 11,000 hours of landscaping work. It currently anticipates getting orders that would utilize 10,500 hours of equipment time from existing customers. Denali charges $110 per hour for landscaping work. Cost information for the current expected activity level is as follows:

Requirement: Denali has received an order for landscaping work from Pamela Corporation at $66 per hour that would require 3,000 hours of equipment time. Variable landscaping costs for the Pamela Corporation order are $75 per hour and variable marketing costs are 3% of revenues. Denali can either accept the Pamela offer in whole or reject it. Should Denali accept the offer?

Data Table

Revenues ($110 10,500 hours)	$1,155,000
Variable landscaping costs (largely labor), which vary with the number of hours worked ($75 per hour 10,500 hours)	787,500
Fixed landscaping costs	105,000
Variable marketing costs (3% of revenues)	34,650
Fixed marketing costs	71,000
Total costs	998,150
Operating income	$156,850

Without One-Time Only Special Order Relevant revenues Relevant variable costs: Landscaping costs Marketing costs Total relevant costs Relevant operating income