The Gannett Company provides landscaping services to corporations and businesses. All its landscaping work requires Gannett...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The Gannett Company provides landscaping services to corporations and businesses. All its landscaping work requires Gannett 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 11,900 hours of equipment time. Gannett charges $85 per hour for landscaping work. Cost information for the current expected activity level is as follows: E (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 Connor. 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 Contribution Margin for Existing Landscape Connor Corporation Customers Landscaping Work Revenues Variable costs: Landscaping costs Marketing costs Total variable costs Contribution margin Determine the contribution margin per hour for existing customers. (Enter amounts to the nearest cent.) = Contribution margin per hour for existing customers per hour %3D Determine the contribution margin per hour for Connor's order and then determine whether Gannett should do any landscaping work for Connor Corporation. (Enter amounts to the nearest cent.) = Contribution margin per hour for Connor's order per hour %3D To maximize operating income, Gannett should allocate as much of its capacity to customers who generate the contribution margin per unit of the constraining resource. That is, Gannett should first allocate equipment capacity to and only the balance to Gannett maximizes total contribution margin by allocating hours of equipment capacity to existing customers and to Connor Corporation, for a total contribution margin of $ $ 1,011,500 Revenues ($85 x 11,900 hours) Variable landscaping costs (including materials and labor), which vary with the number of hours worked ($60 per hour x 11,900 hours) 714,000 Fixed landscaping costs 125,000 Variable marketing costs (6% of revenues) 60,690 65,000 Fixed marketing costs 964,690 Total costs 46,810 Operating income Requirement In order to fill its available capacity, Gannett's salespersons are trying to find new business. Russell Corporation wants Gannett to do 4,600 hours of landscaping work for $100 per hour. Variable landscaping costs for the Russell Corporation order are $50 per hour and variable marketing costs are 5% of revenues. Gannett can accept as much or as little of the 4,600 hours of Russell's landscaping work. What should Gannett Corporation do? The Gannett Company provides landscaping services to corporations and businesses. All its landscaping work requires Gannett 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 11,900 hours of equipment time. Gannett charges $85 per hour for landscaping work. Cost information for the current expected activity level is as follows: E (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 Connor. 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 Contribution Margin for Existing Landscape Connor Corporation Customers Landscaping Work Revenues Variable costs: Landscaping costs Marketing costs Total variable costs Contribution margin Determine the contribution margin per hour for existing customers. (Enter amounts to the nearest cent.) = Contribution margin per hour for existing customers per hour %3D Determine the contribution margin per hour for Connor's order and then determine whether Gannett should do any landscaping work for Connor Corporation. (Enter amounts to the nearest cent.) = Contribution margin per hour for Connor's order per hour %3D To maximize operating income, Gannett should allocate as much of its capacity to customers who generate the contribution margin per unit of the constraining resource. That is, Gannett should first allocate equipment capacity to and only the balance to Gannett maximizes total contribution margin by allocating hours of equipment capacity to existing customers and to Connor Corporation, for a total contribution margin of $ $ 1,011,500 Revenues ($85 x 11,900 hours) Variable landscaping costs (including materials and labor), which vary with the number of hours worked ($60 per hour x 11,900 hours) 714,000 Fixed landscaping costs 125,000 Variable marketing costs (6% of revenues) 60,690 65,000 Fixed marketing costs 964,690 Total costs 46,810 Operating income Requirement In order to fill its available capacity, Gannett's salespersons are trying to find new business. Russell Corporation wants Gannett to do 4,600 hours of landscaping work for $100 per hour. Variable landscaping costs for the Russell Corporation order are $50 per hour and variable marketing costs are 5% of revenues. Gannett can accept as much or as little of the 4,600 hours of Russell's landscaping work. What should Gannett Corporation do? The Gannett Company provides landscaping services to corporations and businesses. All its landscaping work requires Gannett 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 11,900 hours of equipment time. Gannett charges $85 per hour for landscaping work. Cost information for the current expected activity level is as follows: E (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 Connor. 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 Contribution Margin for Existing Landscape Connor Corporation Customers Landscaping Work Revenues Variable costs: Landscaping costs Marketing costs Total variable costs Contribution margin Determine the contribution margin per hour for existing customers. (Enter amounts to the nearest cent.) = Contribution margin per hour for existing customers per hour %3D Determine the contribution margin per hour for Connor's order and then determine whether Gannett should do any landscaping work for Connor Corporation. (Enter amounts to the nearest cent.) = Contribution margin per hour for Connor's order per hour %3D To maximize operating income, Gannett should allocate as much of its capacity to customers who generate the contribution margin per unit of the constraining resource. That is, Gannett should first allocate equipment capacity to and only the balance to Gannett maximizes total contribution margin by allocating hours of equipment capacity to existing customers and to Connor Corporation, for a total contribution margin of $ $ 1,011,500 Revenues ($85 x 11,900 hours) Variable landscaping costs (including materials and labor), which vary with the number of hours worked ($60 per hour x 11,900 hours) 714,000 Fixed landscaping costs 125,000 Variable marketing costs (6% of revenues) 60,690 65,000 Fixed marketing costs 964,690 Total costs 46,810 Operating income Requirement In order to fill its available capacity, Gannett's salespersons are trying to find new business. Russell Corporation wants Gannett to do 4,600 hours of landscaping work for $100 per hour. Variable landscaping costs for the Russell Corporation order are $50 per hour and variable marketing costs are 5% of revenues. Gannett can accept as much or as little of the 4,600 hours of Russell's landscaping work. What should Gannett Corporation do? The Gannett Company provides landscaping services to corporations and businesses. All its landscaping work requires Gannett 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 11,900 hours of equipment time. Gannett charges $85 per hour for landscaping work. Cost information for the current expected activity level is as follows: E (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 Connor. 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 Contribution Margin for Existing Landscape Connor Corporation Customers Landscaping Work Revenues Variable costs: Landscaping costs Marketing costs Total variable costs Contribution margin Determine the contribution margin per hour for existing customers. (Enter amounts to the nearest cent.) = Contribution margin per hour for existing customers per hour %3D Determine the contribution margin per hour for Connor's order and then determine whether Gannett should do any landscaping work for Connor Corporation. (Enter amounts to the nearest cent.) = Contribution margin per hour for Connor's order per hour %3D To maximize operating income, Gannett should allocate as much of its capacity to customers who generate the contribution margin per unit of the constraining resource. That is, Gannett should first allocate equipment capacity to and only the balance to Gannett maximizes total contribution margin by allocating hours of equipment capacity to existing customers and to Connor Corporation, for a total contribution margin of $ $ 1,011,500 Revenues ($85 x 11,900 hours) Variable landscaping costs (including materials and labor), which vary with the number of hours worked ($60 per hour x 11,900 hours) 714,000 Fixed landscaping costs 125,000 Variable marketing costs (6% of revenues) 60,690 65,000 Fixed marketing costs 964,690 Total costs 46,810 Operating income Requirement In order to fill its available capacity, Gannett's salespersons are trying to find new business. Russell Corporation wants Gannett to do 4,600 hours of landscaping work for $100 per hour. Variable landscaping costs for the Russell Corporation order are $50 per hour and variable marketing costs are 5% of revenues. Gannett can accept as much or as little of the 4,600 hours of Russell's landscaping work. What should Gannett Corporation do? The Gannett Company provides landscaping services to corporations and businesses. All its landscaping work requires Gannett 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 11,900 hours of equipment time. Gannett charges $85 per hour for landscaping work. Cost information for the current expected activity level is as follows: E (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 Connor. 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 Contribution Margin for Existing Landscape Connor Corporation Customers Landscaping Work Revenues Variable costs: Landscaping costs Marketing costs Total variable costs Contribution margin Determine the contribution margin per hour for existing customers. (Enter amounts to the nearest cent.) = Contribution margin per hour for existing customers per hour %3D Determine the contribution margin per hour for Connor's order and then determine whether Gannett should do any landscaping work for Connor Corporation. (Enter amounts to the nearest cent.) = Contribution margin per hour for Connor's order per hour %3D To maximize operating income, Gannett should allocate as much of its capacity to customers who generate the contribution margin per unit of the constraining resource. That is, Gannett should first allocate equipment capacity to and only the balance to Gannett maximizes total contribution margin by allocating hours of equipment capacity to existing customers and to Connor Corporation, for a total contribution margin of $ $ 1,011,500 Revenues ($85 x 11,900 hours) Variable landscaping costs (including materials and labor), which vary with the number of hours worked ($60 per hour x 11,900 hours) 714,000 Fixed landscaping costs 125,000 Variable marketing costs (6% of revenues) 60,690 65,000 Fixed marketing costs 964,690 Total costs 46,810 Operating income Requirement In order to fill its available capacity, Gannett's salespersons are trying to find new business. Russell Corporation wants Gannett to do 4,600 hours of landscaping work for $100 per hour. Variable landscaping costs for the Russell Corporation order are $50 per hour and variable marketing costs are 5% of revenues. Gannett can accept as much or as little of the 4,600 hours of Russell's landscaping work. What should Gannett Corporation do? The Gannett Company provides landscaping services to corporations and businesses. All its landscaping work requires Gannett 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 11,900 hours of equipment time. Gannett charges $85 per hour for landscaping work. Cost information for the current expected activity level is as follows: E (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 Connor. 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 Contribution Margin for Existing Landscape Connor Corporation Customers Landscaping Work Revenues Variable costs: Landscaping costs Marketing costs Total variable costs Contribution margin Determine the contribution margin per hour for existing customers. (Enter amounts to the nearest cent.) = Contribution margin per hour for existing customers per hour %3D Determine the contribution margin per hour for Connor's order and then determine whether Gannett should do any landscaping work for Connor Corporation. (Enter amounts to the nearest cent.) = Contribution margin per hour for Connor's order per hour %3D To maximize operating income, Gannett should allocate as much of its capacity to customers who generate the contribution margin per unit of the constraining resource. That is, Gannett should first allocate equipment capacity to and only the balance to Gannett maximizes total contribution margin by allocating hours of equipment capacity to existing customers and to Connor Corporation, for a total contribution margin of $ $ 1,011,500 Revenues ($85 x 11,900 hours) Variable landscaping costs (including materials and labor), which vary with the number of hours worked ($60 per hour x 11,900 hours) 714,000 Fixed landscaping costs 125,000 Variable marketing costs (6% of revenues) 60,690 65,000 Fixed marketing costs 964,690 Total costs 46,810 Operating income Requirement In order to fill its available capacity, Gannett's salespersons are trying to find new business. Russell Corporation wants Gannett to do 4,600 hours of landscaping work for $100 per hour. Variable landscaping costs for the Russell Corporation order are $50 per hour and variable marketing costs are 5% of revenues. Gannett can accept as much or as little of the 4,600 hours of Russell's landscaping work. What should Gannett Corporation do?
Expert Answer:
Answer rating: 100% (QA)
A Contribution Margin For Existing Landscape Customers Contribution Margin For Connor Corporation La... View the full answer
Posted Date:
Students also viewed these accounting questions
-
Assuming there are no accidents or delays, the distance that a car travels down the interstate can be calculated with the following formula: Distance = Speed Time Create a VB application that allows...
-
All Eyes Security Services Company provides security monitoring services. It employs four security specialists. Each specialist works an average of 180 hours a month. The companys controller has...
-
Special order with no spare capacity Crystal Lattice produces exercise mats for use in fitness centres. Production capacity is 20 000 mats per year. Due to a chain of fitness centres closing, Crystal...
-
Would you ever expect to find a tumor-inducing retrovirus that carried a processed cellular tumor suppressor gene in its genome?
-
The dollar interest rate is 5% (continuously compounded) and the yen rate is 1% (continuously compounded). Consider an at-the-money American dollar call that is yen-denominated (i.e., the call...
-
The cost of weddings in the United States has skyrocketed in recent years. As a result, many couples are opting to have their weddings in the Caribbean. A Caribbean vacation resort recently...
-
Intuition in decision-making can expedite decision-making (versus cognitive domains that are slow and deliberate), but it can fail or mislead us, too. How can that be?
-
Pixel Graphics is a graphics arts design consulting firm. Marcie Biel, its treasurer and vice president of finance, has prepared a classified balance sheet as of August 31, 2010, the end of its...
-
Make scientific discussion and conclusion for a poster about bladeless wind turbines using the following information. Bladeless wind turbines have several promising applications due to their unique...
-
The motion picture business has been left for dead a number of times in the past 100+ years. With the advent of streaming technology, have we placed the final nail in the coffin? Give reasons and...
-
The Apache NetBeans Platform is a broad Swing-based framework on which you can base large desktop applications. (True/False)
-
The Apache NetBeans IDE is an open-source integrated development environment, and it supports development of all Java application types, which include . a. Java desktop applications b. Mobile and Web...
-
For an upcoming presentation, prepare an engaging opening. Try something original and creative but consider the audience carefully so you dont lose credibility by trying to capture attention in a way...
-
What are the advantages to using an integrated database approach over a file processing approach?
-
The Java EE differs from the Java SE in that it adds libraries that provide functionality to deploy fault-tolerant, distributed, multi-tier Java software, based largely on modular components running...
-
It is 1 July, 2013. On 1 July, 2011 you received an inheritance of $1000 which you deposited into a savings account earning 6% p.a. compounded monthly. You need plan to buy a house and you want to...
-
Use of the contraceptive Depo Provera appears to triple women's risk of infection with chlamydia and gonorrhea , a study reports today. An estimated 20 million to 30 million women worldwide use Depo...
-
From the following trial balance of G. Foot after his first year's trading, you are required to draw up a statement of profit or loss for the year ending 30 June 2016. A statement of financial...
-
At the beginning of the financial year on 1 April 2017, a company had a balance on plant account of 372,000 and on provision for depreciation of plant account of 205,400. The company's policy is to...
-
(a) Distinguish between capital and revenue expenditure. (b) Drake Ltd took delivery of a computer network on 1 July 2016, the beginning of its financial year. The list price of the equipment was...
Study smarter with the SolutionInn App