Elsea 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 17,000 units of product, computations for the sales price per clock follow.

Unit-level costs	$	408,000
Fixed costs		68,000
Total cost (a)		476,000
Markup (a 0.25)		119,000
Total sales (b)	$	595,000
Sales price per unit (b 17,000)	$	35

Required a-1. Elsea has excess capacity and receives a special order for 8,000 clocks for $27 each. Calculate the contribution margin per unit from the special order Contribution per unit margin a-2. Should Elsea accept the special order? Yes O No b. Prepare a contribution margin income statement for the special order. ELSEA COMPANY Income Statement