The Rirnaray a Conpany 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 $13,000$ hours of landscaping work. It currently anticipates getting orders that would utilize

$12,000$ hours of equipment time. 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.

Begin by completing an analysis, and start by showing the computation of the company's contribution margin without the landscaping work from Louise.

Next, calculate the contribution margin of the special order. $($Calculate the contribution margin for the special order assuming there are no constraints on

landscaping hours.$)$

Contribution Margin for

Existing Landscape

Customers

Contribution Margin for

Louise Corporation

Landscaping Work

Revenues

Variable costs:

Requirement

In order to fill its available capacity, Himalaya's salespersons are trying to find new

business. Louise Corporation wants Himalaya to do $2,700$ hours of landscaping

work for $$68$ per hour. Variable landscaping costs for the Louise Corporation order

are $$55$ per hour and variable marketing costs are $5\%$ of revenues. Himalaya can

accept as much or as little of the $2,700$ hours of Louise's landscaping work. What

should Himalaya Corporation do$?$

Data table

Revenues hours

Total costs