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

   

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The Himalaya Company provides landscaping services to corporations and businesses. All its landscaping work requires Himalaya to use landscaping equipment. Its landscaping equipment has the capacity to do 12,500 hours of landscaping work. It is currently utilizing 10,500 hours of equipment time. Himalaya charges $110 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 Himalaya accepts the special order. (If a box is not used in the table, leave the box empty; do not select a label or enter a zero. Use parentheses or a minus sign to enter a decrease in operating income.) Less: Increase (decrease) in operating income by accepting the one-time special order Data table Revenues ($110 x 10,500 hours) Variable landscaping costs (including materials and labor), which vary with the number of hours worked ($75 per hour x 10,500 hours) Fixed landscaping costs Variable marketing costs (3% of revenues) Fixed marketing costs Total costs Operating income $ 1,155,000 787,500 105,000 34,650 67,000 994,150 $ 160,850 Print Done - Requirement Himalaya has just received a one-time only special order for landscaping work from Flora Corporation at $64 per hour that would require 2,000 hours of equipment time. Should Himalaya accept the offer even though revenue per hour is less than Himalaya's landscaping cost of $85 per hour [($787,500 + $105,000) / 10,500 hours)]. No marketing costs will be necessary for the one-time only special order. For Print Done X Clear all The Himalaya Company provides landscaping services to corporations and businesses. All its landscaping work requires Himalaya to use landscaping equipment. Its landscaping equipment has the capacity to do 12,500 hours of landscaping work. It is currently utilizing 10,500 hours of equipment time. Himalaya charges $110 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 Himalaya accepts the special order. (If a box is not used in the table, leave the box empty; do not select a label or enter a zero. Use parentheses or a minus sign to enter a decrease in operating income.) Less: Increase (decrease) in operating income by accepting the one-time special order Data table Revenues ($110 x 10,500 hours) Variable landscaping costs (including materials and labor), which vary with the number of hours worked ($75 per hour x 10,500 hours) Fixed landscaping costs Variable marketing costs (3% of revenues) Fixed marketing costs Total costs Operating income $ 1,155,000 787,500 105,000 34,650 67,000 994,150 $ 160,850 Print Done - Requirement Himalaya has just received a one-time only special order for landscaping work from Flora Corporation at $64 per hour that would require 2,000 hours of equipment time. Should Himalaya accept the offer even though revenue per hour is less than Himalaya's landscaping cost of $85 per hour [($787,500 + $105,000) / 10,500 hours)]. No marketing costs will be necessary for the one-time only special order. For Print Done X Clear all