1. An electronics manufacturer produces a new gadget: Variable costs $30/unit, fixed costs $100,000, selling price $50/unit, expected sales volume 10,000 units.
   • Requirements:
     • Apply the revenue recognition principle to determine when revenue should be recognized for gadget sales.
     • Calculate the contribution margin per unit and total contribution margin.
     • Prepare a variable costing income statement with revenue recognition implications.
     • Recommend pricing strategies to maximize profitability considering revenue recognition timelines.
     • Discuss how revenue recognition affects decision-making for product pricing and sales volume.