The Forester Company provides landscaping services to corporations and businesses. All its landscaping work requires Forester...

 

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The Forester Company provides landscaping services to corporations and businesses. All its landscaping work requires Forester to use landscaping equipment. Its landscaping equipment has the capacity to do 10,500 hours of landscaping work It is currently utilizing 9,500 hours of equipment time. Forester 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 requirement. Begin by determining the change in operating income if Forester accepts the special order. (If an input field is not used in the table, leave the input field empty; do not select a label or enter a zero. Use parentheses or a minus sign to enter a decrease in operating income.) Revenues Less: Variable landscaping costs Increase (decrease) in operating income by accepting the one-time special order Should Forester accept the special order from Juniper Corporation? Will operating income increase or decrease? By how much? i Requirement $ Forester has just received a one-time only special order for landscaping work from Juniper Corporation at $62 per hour that would require 1,000 hours of equipment time. No marketing costs will be necessary for the one-time only special order. Should Forester accept the offer even though revenue per hour is less than Forester's landscaping cost of $80 per hour [($665,000+ $95,000) +9,500 hours)]. $ No Decrease JNOE 62,000 70,000 (8,000) Data Table Revenues ($95 x 9,500 hours) Variable landscaping costs (largely labor), which vary with the number of hours worked ($70 per hour x 9,500 hours) Fixed landscaping costs Variable marketing costs (6% of revenues) Fixed marketing costs Total costs Operating income $902,500 $ 665,000 95,000 54,150 67,000 881,150 21,350 The Forester Company provides landscaping services to corporations and businesses. All its landscaping work requires Forester to use landscaping equipment. Its landscaping equipment has the capacity to do 10,500 hours of landscaping work It is currently utilizing 9,500 hours of equipment time. Forester 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 requirement. Begin by determining the change in operating income if Forester accepts the special order. (If an input field is not used in the table, leave the input field empty; do not select a label or enter a zero. Use parentheses or a minus sign to enter a decrease in operating income.) Revenues Less: Variable landscaping costs Increase (decrease) in operating income by accepting the one-time special order Should Forester accept the special order from Juniper Corporation? Will operating income increase or decrease? By how much? i Requirement $ Forester has just received a one-time only special order for landscaping work from Juniper Corporation at $62 per hour that would require 1,000 hours of equipment time. No marketing costs will be necessary for the one-time only special order. Should Forester accept the offer even though revenue per hour is less than Forester's landscaping cost of $80 per hour [($665,000+ $95,000) +9,500 hours)]. $ No Decrease JNOE 62,000 70,000 (8,000) Data Table Revenues ($95 x 9,500 hours) Variable landscaping costs (largely labor), which vary with the number of hours worked ($70 per hour x 9,500 hours) Fixed landscaping costs Variable marketing costs (6% of revenues) Fixed marketing costs Total costs Operating income $902,500 $ 665,000 95,000 54,150 67,000 881,150 21,350

Answer rating: 100% (QA)

Determine whether Forester should accept the special order from Juniper Corporation Incremental re... View the full answer