60.1K

Verified Solution

Link Copied!

Stuart 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 20,000 units of product, computations for the sales price per clock follow. Unit-level costs Fixed costs Total cost (a) Markup (a x 0.25) Total sales (6) sales price per unit (b = 20,828) $420, eee 60, eee 480, eee 120,000 $688,888 $ 3e Required a. Stuart has excess capacity and receives a special order for 7,000 clocks for $24 each. Calculate the contribution margin per unit. Based on this, should Stuart 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. Required A Required B Stuart has excess capacity and receives a special order for 7,000 clocks for $24 each. Calculate the contribution margin per unit. Based on this, should Stuart accept the special order? Contribution margin per unit Should Stuart accept the special order? Required A Required B Stuart 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 20.000 units of product, computations for the sales price per clock follow. Unit-level costs Fixed costs Total cost (a) Markup (a x 0.25) Total sales (6) sales price per unit (b = 20,000) $420, eee 60, eee 480, eee 120,000 $688,888 $ 3e Required a. Stuart has excess capacity and receives a special order for 7,000 clocks for $24 each. Calculate the contribution margin per unit. Based on this, should Stuart 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. Required A Required B Prepare a contribution margin income statement for the special order. STUART COMPANY Contribution Margin Income Statement

Answer & Explanation Solved by verified expert

See Answer