Prepare a contribution margin income statement for the

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Reference no: EM13589141

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

Required:

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.)

Reference no: EM13589141

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