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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

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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 capacity to do 10,500 hours of landscaping work. It currently anticipates getting orders that would utilize 9,100 hours of equipment time from existing customers. Himalaya 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 Himalaya 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 $ 955,500 637,000 Revenues ($105 x 9,100 hours) Variable landscaping costs (including materials and labor), which vary with the number of hours worked ($70 per hour x 9,100 hours) Fixed landscaping costs Variable marketing costs (5% of revenues) 125,000 47,775 67,000 Fixed marketing costs Total costs 876,775 78,725 Operating income 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 10,500 hours of landscaping work. It currently anticipates getting orders that would utilize 9,100 hours of equipment time from existing customers. Himalaya 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 Himalaya 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 $ 955,500 637,000 Revenues ($105 x 9,100 hours) Variable landscaping costs (including materials and labor), which vary with the number of hours worked ($70 per hour x 9,100 hours) Fixed landscaping costs Variable marketing costs (5% of revenues) 125,000 47,775 67,000 Fixed marketing costs Total costs 876,775 78,725 Operating income

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