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this is a practice accounting problem Begin by determining the change in operating income if Denali accepts the special order. (If a box is not
this is a practice accounting problem
Begin by determining the change in operating income if Denali accepts the special order. (If a box is not used in the table, leave the box empty; do not select a label or enter a zero. Use parentheses or a minus sign to enter a decrease in operating income.) Data table Revenues ( $959,500 hours) Variable landscaping costs (including materials and labor), which vary with the number of hours worked ( $70 per hour 9,500 hours) Fixed landscaping osts Variable marketing costs ( 3% of revenues) Fixed marketing costs Total costs Operating income \begin{tabular}{rr} $902,500 \\ 665,000 \\ 95,000 \\ 27,075 \\ 74,000 \\ \hline 861,075 \\ \hline$41,425 \\ \hline \hline \end{tabular} The Denali Company provides landscaping services to corporations and businesses. All its landscaping work requires Denali to use landscaping equipment. Its landscaping equipment has the capacity to do 11,000 hours of landscaping work. It is currently utilizing 9,500 hours of equipment time. Denali charges $95 per hour for landscaping work. Cost information for the current activity level is as follows: (Click the icon to view the cost information.) Requirement Denali has just received a one-time only special order for landscaping work from Flora Corporation at $62 per hour that would require 1,500 hours of equipment time. Should Denali accept the offer even though revenue per hour is less than Denali's landscaping cost of $80 per hour [( $665,000+$95,000)/9,500 hours )]. No marketing costs will be necessary for the one-time only special order. The Denali Company provides landscaping services to corporations and businesses. All its landscaping work requires Denali to use landscaping equipment. Its landscaping equipment has the capacity to do 11,000 hours of landscaping work. It is currently utilizing 9,500 hours of equipment time. Denali charges $95 per hour for landscaping work. Cost information for the current activity level is as follows: (Click the icon to view the cost information.) Read the Step by Step Solution
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