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The Himalaya Company provides landscaping services to corporations and businesses. All its landscaping work requires Himalaya to use landscaping equipment. Its landscaping equipment has
The Himalaya Company provides landscaping services to corporations and businesses. All its landscaping work requires Himalaya to use landscaping equipment. Its landscaping equipment has the capacity to do 14,500 hours of landscaping work. It currently anticipates getting orders that would utilize 13,100 hours of equipment time from existing customers. Himalaya 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 CHIED Without One-Time Only Special Order One-Time Only Special Order 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 onder, and then dotemen whether Himalaya should accopt or reject the special order With Data table - X D 1,310,000 1403600 Relevant revenues Relevant variable costs Landscaping costs Marketing costs Revenues ($100 x 13.100 hours) $1.310,000 Variable landscaping costs (including materials and labor), which vary with the number of hours worked ($75 per hour x 13,100 hours) 2,500 082.500 65,500 Total relevant costs S 1.040.000 Relevant operating income 262,000 Fixed landscaping costs Variable marketing costs (5% of revenues) Fixed marketing costs Total costs Operating income 8,000 65.500 67.000 1.203.000 107,000
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