Munoz Company, which produces and sells a small digital clock, bases its pricing strategy on a...

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Munoz Company, which produces and sells a small digital clock, bases its pricing strategy on a 20 percent markup on total cost. Based on annual production costs for 20,000 units of product, computations for the sales price per clock follow: Unit-level costs Fixed costs Total cost (a) Markup (a x 0.20) Total sales (b) Sales price per unit (b + 20,000) $440,000 60,000 500,000 100,000 $600,000 $ 30 Required a. Munoz has excess capacity and receives a special order for 7,000 clocks for $25 each. Calculate the contribution margin per unit. Based on this, should Munoz accept the special order? b. Prepare a contribution margin income statement for the special order. Munoz Company, which produces and sells a small digital clock, bases its pricing strategy on a 20 percent markup on total cost. Based on annual production costs for 20,000 units of product, computations for the sales price per clock follow: Unit-level costs Fixed costs Total cost (a) Markup (a x 0.20) Total sales (b) Sales price per unit (b + 20,000) $440,000 60,000 500,000 100,000 $600,000 $ 30 Required a. Munoz has excess capacity and receives a special order for 7,000 clocks for $25 each. Calculate the contribution margin per unit. Based on this, should Munoz accept the special order? b. Prepare a contribution margin income statement for the special order.

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a Cont ribution Marg in per Unit Sales Price per Unit Unit Level Costs Cont ribution Mar... View the full answer