Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

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 15,000 hours of landscaping work. It currently anticipates getting orders that would utilize 14,100 hours of equipment time. Everest charges $75 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 showir (Calculate the contribution margin for the special ord Data Table calculate the contribution margin of the special order Contribution Marg Existing Landsd $ 1,057,500 Customers Revenues Revenues ($75 x 14,100 hours) Variable landscaping costs (including materials and labor), which vary with the number of hours worked ($52 per hour x 14,100 hours) Fixed landscaping costs Variable marketing costs (6% of revenues) Fixed marketing costs 733,200 110,000 Variable costs: Landscaping costs 63,450 70,000 Marketing costs 976,650 Total costs Total variable costs $ 80,850 Operating income Contribution margin Determine the contribution margin per hour for existir Print Done per hour Determine the contribution margin per hour for Ashton's order and then determine whether Everest should do any landscaping work for Ashton Corporation. (Enter amounts to the nearest cent.) Choose from any list or enter any number in the input fields and then continue to the next question. Save for later 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 15,000 hours of landscaping work. It currently anticipates getting orders that would utilize 14,100 hours of equipment time. Everest charges $75 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 contribution margin without the landscaping work from Ashton. Next, calculate the contribution margin of the special orde (Calculate the contribution margin for the special order assuming there are no constraints on landscaping hours.) Requirement Contribution Margin for Existing Landscape Customers Revenues Variable costs: In order to fill it available capacity, Everest's salespersons are trying to find new business. Ashton Corporation wants Everest to do 5,500 hours of landscaping work for $66 per hour. Variable servicing costs for the Ashton Corporation order are $55 per hour and variable marketing costs are 6% of revenues. Everest can accept as much or as little of the 5,500 hours of Ashton's landscaping work. What should Everest Corporation do? Landscaping costs Marketing costs Total variable costs Print Done Contribution margin Determine the contribution margin per hour for existing customers. (Enter amounts to the nearest cent.) = Contribution margin per hour for existing customers per hour Determine the contribution margin per hour for Ashton's order and then determine whether Everest should do any landscaping work for Ashton Corporation. (Enter amounts to the nearest cent.) Choose from any list or enter any number in the input fields and then continue to the next question. 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 15,000 hours of landscaping work. It currently anticipates getting orders that would utilize 14,100 hours of equipment time. Everest charges $75 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 fequiremen Begin by completing an analysis, and start by showing the computation of the company's contribution margin without the landscaping work from Ashton. Next, calculate the contribution margin of the special order. (Calculate the contribution margin for the special order assuming there are no constraints on landscaping hours.) Contribution Margin for Existing Landscape Contribution Margin for Ashton Corporation Landscaping Work Customers Revenues Variable costs: Landscaping costs Marketing costs Total variable costs Contribution margin Determine the contribution margin per hour for existing customers. (Enter amounts to the nearest cent.) = Contribution margin per hour for existing customers per hour Choose from any list or enter any number in the input fields and then continue to the next question. ? 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 15,000 hours of landscaping work. It currently anticipates getting orders that would utilize 14,100 hours of equipment time. Everest charges $75 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 fequiremen TVICINCung cuota Total variable costs Contribution margin Determine the contribution margin per hour for existing customers. (Enter amounts to the nearest cent.) = Contribution margin per hour for existing customers per hour Determine the contribution margin per hour for Ashton's order and then determine whether Everest should do any landscaping work for Ashton Corporation. (Enter amounts to the nearest cent.) = Contribution margin per hour for Ashton's order per hour To maximize operating income, Everest should allocate as much of its capacity to customers who generate the contribution margin per unit of the constraining resource. That is, Everest should first allocate equipment capacity to and only the balance to hours of equipment capacity to existing customers and Everest maximizes total contribution margin by allocating to Ashton Corporation, for a total contribution margin of $ Choose from any list or enter any number in the input fields and then continue to the next

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Ethics

Authors: Ronald F. Duska, Brenda Shay Duska, Kenneth Wm. Kury

3rd Edition

1119118786, 9781119118787

More Books

Students also viewed these Accounting questions

Question

Explain the process of MBO

Answered: 1 week ago

Question

What makes Zipcar an attractive employer for which to work?

Answered: 1 week ago

Question

Evaluate Figure 6-9; what other questions would you ask, and why?

Answered: 1 week ago