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

 
  

 

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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?

Answer rating: 100% (QA)

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