Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribedimage text in transcribedimage text in transcribed
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, 090 Markup (a x 0.25) 80, 000 Total sales (b) $ 400, 000 Sales price per unit (b : 16,000) $ 25 Required a. 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? 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. FINCH COMPANY Contribution Margin Income Statement

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting Volume 2

Authors: Thomas Beechy, Joan Conrod, Elizabeth Farrell, Ingrid McLeod-Dick

6th Edition

1259105482, 9780071338820

More Books

Students also viewed these Accounting questions

Question

List the 8 Es and explain how they impact organizational success.

Answered: 1 week ago

Question

1. Background knowledge of the subject and

Answered: 1 week ago

Question

2. The purpose of the acquisition of the information.

Answered: 1 week ago