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Gibson Company, which produces and sells a small digital clock, bases its pricing strategy on a 25 percent markup on total cost. Based on annual
Gibson 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 12,000 units of product, computations for the sales price per clock follow. Required a. Gibson has excess capacity and receives a special order for 7,000 clocks for $28 each. Calculate the contribution margin per unit. Based on this, should Gibson 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. Gibson has excess capacity and receives a special order for 7,000 clocks for $28 each. Calculate the contribution margin per unit. Based on this, should Gibson accept the special order? Prepare a contribution margin income statement for the special order. Prepare a contribution margin income statement for the special order. \begin{tabular}{|c|} \hline GIBSON COMPANY \\ \hline Contribution Margin Income Statement \\ \hline \\ \hline \end{tabular} Contribution to profit Contribution to loss
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