It\'s incorrect (X ) TI 11-2 (similar to) Question Help The Foraker Company prov

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(X ) TI 11-2 (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 currently 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 requiremen 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 Foraker should accept or reject the special order. Without One-Time Only Special Order With One-Time Only Special Order Requirement 1,265,000 1405000 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? Relevant revenues Relevant variable costs: 632,500 75,900 708,400 556,600 786500 84300 870800 534200 Landscaping costs Marketing costs Total relevant costs PrintDone Enter any number in the edit fields and then click Check Answer

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Without one time only special order. With one time only special order. Relevant Revenues $1,265,000 $1,152,000 Relevant Variable Cost Landscaping costs ($55 per hour),11500 ; 11500+2800 $632,500 $660,000 Marketing costs (6% of Sales) $75,900 $69,120 Total relevant costs $708,400 $729,120 Relevant operating income $556,600 $422,880 Total Maximum production capacity = 12000.00 hours Special order = -2800.00 hours Regular capacity 9200.00 hours With one time only special order. Relevant revenues = 9200hrs x $110 + 2800 hrs x $50 $1,152,000 Landscaping cost = $55 x $12000 $660,000

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