Shenyang Company, which produces and sells a small digital clock, bases its pricing strategy on a 25 percent markup on total cost. Based on annual production costs for 12,000 units of product, computations for the sales price per clock follow.
|
| Unit-level costs |
$ |
276,000 |
|
| Fixed costs |
|
60,000 |
|
|
|
|
|
| Total cost (a) |
|
336,000 |
|
| Markup (a × 0.25) |
|
84,000 |
|
|
|
|
|
| Total sales (b) |
$ |
420,000 |
|
|
|
|
|
| Sales price per unit (b ÷ 12,000) |
$ |
35 |
|
|
|
|
|
|
| a-1. |
Shenyang has excess capacity and receives a special order for 7,000 clocks for $28 each. Calculate the contribution margin per unit from the special order. (Omit the "$" sign in your response.)
|
|
Contribution margin per unit
|
$
|
| b. |
Prepare a contribution margin income statement for the special order. (Input all amounts as positive values. Omit the "$" sign in your response.)
|