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The Forester Company provides landscaping services to corporations and businesses. All its landscaping work requires Forester to use landscaping equipment. Its landscaping equipment has
The Forester Company provides landscaping services to corporations and businesses. All its landscaping work requires Forester 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 13,500 hours of equipment time from existing customers. Forester charges $120 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 Forester 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 Inco 1)
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