Benson Company, which produces and sells a small digital clock, bases its pricing strategy on a...
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Benson 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 10,000 units of product, computations for the sales price per clock follow. Unit-level costs Fixed costs Total cost (a) Markup (a x 0.25) Total sales (b) $ 150,000 50,000 200,000 50,000 $ 250,000 Sales price per unit (b + 10,000) $ 25 Required a. Benson has excess capacity and receives a special order for 7,000 clocks for $21 each. Calculate the contribution margin per unit. Based on this, should Benson accept the special order? b. Prepare a contribution margin income statement for the special order. Complete this question by entering your answers in the tabs below. Require A Required B Benson has excess capacity and receives a special order for 7,000 clocks for $21 each. Calculate the contribution margin per unit. Based on this, should Benson accept the special order? Contribution margin per unit Should Benson accept the special order? Required A Required B > Benson 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 10,000 units of product, computations for the sales price per clock follow. Unit-level costs Fixed costs Total cost (a) Markup (a x 0.25) Total sales (b) $ 150,000 50,000 200,000 50,000 $ 250,000 Sales price per unit (b + 10,000) $ 25 Required a. Benson has excess capacity and receives a special order for 7,000 clocks for $21 each. Calculate the contribution margin per unit. Based on this, should Benson accept the special order? b. Prepare a contribution margin income statement for the special order. Complete this question by entering your answers in the tabs below. Require A Required B Benson has excess capacity and receives a special order for 7,000 clocks for $21 each. Calculate the contribution margin per unit. Based on this, should Benson accept the special order? Contribution margin per unit Should Benson accept the special order? Required A Required B >
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