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Problem: Module 6 Textbook Problem 4 Learning Objective: 6-2 Make appropriate special order decisions Campbell Company, which produces and sells a small digital clock,
Problem: Module 6 Textbook Problem 4 Learning Objective: 6-2 Make appropriate special order decisions Campbell Company, which produces and sells a small digital clock, bases its pricing strategy on a 20 percent markup on total cost. Based on annual production costs for 11,000 units of product, computations for the sales price per clock follow. Unit-level costs Fixed costs Total cost (a) Markup (a x 0.20) Total sales (b) Sales price per unit (b + 11,000) $198,000 77,000 275,000 55,000 $330,000 $ 30 Required a. Campbell has excess capacity and receives a special order for 8,000 clocks for $20 each. Calculate the contribution margin per unit. Based on this, should Campbell 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 Campbell has excess capacity and receives a special order for 8,000 clocks for $20 each. Calculate the contribution margin per unit. Based on this, should Campbell accept the special order? Contribution margin per unit Should Campbell accept the special order?
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