Exercise $6-9$A $($Algo$)$ Using the contribution margin approach for a special order decision LO $6-2$

Finch 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 $16,000$ units of product, computations for the sales price per clock follow.

Required

a$.$ Finch has excess capacity and receives a special order for $4,000$ clocks for $$20$ each. Calculate the contribution margin per unit Based on this, should Finch accept the special order?

b$.$ Prepare a contribution margin income statement for the special order.

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Required B

Finch has excess capacity and receives a special order for $4,000$ clocks for $$20$ each. Calculate the contribution margin per unit. Based on this, should Finch accept the special order?