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The Rainier Company provides landscaping services to corporations and business. All its landscaping work requires Rainier to use landscaping equipment. Its landscaping equipment has the
The Rainier Company provides landscaping services to corporations and business. All its landscaping work requires Rainier to use landscaping equipment. Its landscaping equipment has the capacity to do 10,000 hours of landscaping work. It currently anticipates getting orders that would uhlize 9,000 hours of equipment time. Rainier charges $80 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 i -X Data Table Contribution margin or contribution margin for Existing Landscape Hudson Corporation Customers Landscaping Work Revenues (S80 x 9,000 hours) 720.000 Revenues Variable landscaping costs (including materials and labor), which vary 450,000 Variable costs: with the number of hours worked ($50 per hour x 9,000 hours) Landscaping costs Fixed landscaping costs 108,000 Marketing costs Variable marketing costs (5% of revenues) 36,000 Fixed marketing costs Total variable costs 72.000 666.000 Total costs Contribution margin 54,000 Operating income Determine the contribution margin per hour for existing customers. (Enter amounts to the nearest cent) Print Done Contribution margin per hour for existing customers per hour Determine the contribution margin per hour for Hudson's order and then determine whether Rainier should do any landscaping work for Hudson Corporation. (Enter amou - Contribution margin per hour for Hudson's order per hour Requirement To maximize operating income, Rainier should allocate as much of ils capacity to customers who generate the contribution margin per unit of the constraining resource. That is, Rainier should first allocate guipment capacity to and only the balance to In order to fill it available capacity, Rainier's salespersons are trying to find new business Hudson Corporation wants Rainier to do 4,000 hours of landscaping work for $70 per hour. Variable servicing costs for the Hudson Corporation order are $45 per hour and variable marketing costs are 5% of revenues. Rainier can accept as much or as little of the 4,000 hours of Hudson's landscaping work. What should Rainier Corporation do? hours of equipment capacity to existing custo Rainier maximizes total contribution margin by allocating to Hudson Corporation, for a total contribution margin of $ Print Done Choose from any list or enter any number in the input fields and then continue to the next question Save for Later
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