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Answer parts a and b. Fanning Company, which produces and sells a small digital clock, bases its pricing strategy on a 25 percent markup on
Answer parts a and b.
Fanning 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 15,000 units of product, computations for the sales price per clock follow. Unit-level costs Fixed costs Total cost (a) Markup (a * 0.25) Total sales (b) Sales price per unit (b + 15,000) $285,000 75,000 360,000 90,000 $450,000 $ 30 Required a. Fanning has excess capacity and receives a special order for 9,000 clocks for $23 each. Calculate the contribution margin per unit. Based on this, should Fanning 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 Fanning has excess capacity and receives a special order for 9,000 clocks for $23 each. Calculate the contribution margin per unit. Based on this, should Fanning accept the special order? Contribution margin per unit Should Fanning accept 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. FANNING COMPANY Contribution Margin Income StatementStep by Step Solution
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