Finch 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 16,000 units of product, computations for the sales price per clock follow:

Unit-level costs $240,000

Fixed costs 80,000

Total cost (a) 320,000

Markup (a 0.25) 80,000

Total sales (b) $400,000

Sales price per unit (b 16,000) $25

1. Finch has excess capacity and receives a special order for 4,000 clocks for $20 each. Calculate the contribution margin per unit. Based on this, should Finch accept the special order?

Contribution margin per unit

Should Finch accept the special order?

2. a contribution margin income statement for the special order.

Incremental revenue

Variable Costs

Contribution to profit ________