TI11-2 (similar to) Question Help * The Foraker Company provides landscaping ser

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TI11-2 (similar to) Question Help * The Foraker Company provides landscaping services to corporations and businesses. All its landscaping work requires Foraker to use landscaping equipment Its landscaping equipment has the capacity to do 12,000 hours of landscaping work. It currenthy anticipates getting orders that would utilize 11,500 hours of equipment time from existing customers. Rainier charges $110 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 enurement Begin by completing an analysis, and start by showing the computation of the company's operating incoms without the special order. Next, calculate operating income with the special order, and then determine whether Foraker should accept or reject the special order Data Table Without One-Time Only Special Order Revenues (3110 x 11,500 hours) Variable landscaping costs (including materials and labor), which vary 1,265,000 Relevant revenues 632,500 Relevant variable costs Marketing costs Total relevant costs Relevant operating income with the number of hours worked ($55 per hour x 11,500 hours) Fixed landscaping costs Variable marketing costs (6% of revenues) Fxed marketing costs Total costs 96,000 75,900 65,000 869,400 395,600 Operating income PrintDone Foraker has received an order for landscaping work from Nancy Corporation at $50 per hour that would require 2,800 hours of equipment time. Variable landscaping costs for the Nancy Corporation order are $55 per hour and variable marketing costs are 6% of revenues. Foraker can either accept the Nancy offer in whole or reject it. Should Foraker accept the offer? Print Done

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer and please give thumbs up   Statementshowing Computations Paticulars Without Special order Special Order Income with special order Sales      1,265,000.00         140,000.00                     1,405,000.00 Less Variable Expenses   Variable Landscaping costs         632,500.00         154,000.00                         786,500.00 Variable Marketing costs            75,900.00             8,400.00                           84,300.00 Contribution Margin         556,600.00         (22,400.00)                         534,200.00 Fixed cost Fixed Landscaping costs            96,000.00                           96,000.00 Fixed Marketing costs            65,000.00                           65,000.00 Net operating income         395,600.00         (22,400.00)                         373,200.00 Reject special order

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