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

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The Gannett Company provides landscaping services to corporations and businesses. All its landscaping work requires Gannett to use landscaping equipment. Its landscaping equipment has the capacity to do 14,000 hours of landscaping work. It currently anticipates getting orders that would utilize 12,600 hours of equipment time from existing customers. Gannett charges $105 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 Gannett should accept or reject the special order. Without With One-Time Only One-Time Only Special Order Special Order Relevant revenues Relevant variable costs: Landscaping costs Marketing costs Total relevant costs Relevant operating income Gannett should the special order from Louise Corporation because operating income will by $ Data table $ 1,323,000 882,000 Revenues ($105 x 12,600 hours) Variable landscaping costs (including materials and labor), which vary with the number of hours worked ($70 per hour x 12,600 hours) Fixed landscaping costs Variable marketing costs (7% of revenues) 88,000 92,610 67,000 Fixed marketing costs Total costs 1,129,610 $ 193,390 Operating income X Requirement Gannett has received an order for landscaping work from Louise Corporation at $64 per hour that would require 2,200 hours of equipment time. Variable landscaping costs for the Louise Corporation order are $70 per hour and variable marketing costs are 7% of revenues. Gannett can either accept the Louise offer in whole or reject it. Should Gannett accept the offer

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