-Exercise 6-9B Using the contribution margin approach for a special order decision Benton Company produces and sells a food processor that it prices at a 32 percent markup o cost. Based on data pertaining to producing and selling 50,000 food processors, Benton compu sales price per food processor as follows. Unit-level costs $ 750,000 Fixed costs 500,000 $1,250,000 Total cost (a) Markup (a x 0.32) 400,000 Total sales revenue (b) $1,650,000 Sales price per unit (b 50,000) 24 33.00 Required a. Benton receives a special order for 7,000 food processors for $20 each. Benton has excess ca Calculate the contribution margin per unit for the special order. Based on the contribution per unit, should Benton accept the special order? b. Support your answer by preparing a contribution margin income statement for the special o
-Exercise 6-9B Using the contribution margin approach for a special order decision Benton Company produces and sells a food processor that it prices at a 32 percent markup o cost. Based on data pertaining to producing and selling 50,000 food processors, Benton compu sales price per food processor as follows. Unit-level costs $ 750,000 Fixed costs 500,000 $1,250,000 Total cost (a) Markup (a x 0.32) 400,000 Total sales revenue (b) $1,650,000 Sales price per unit (b 50,000) 24 33.00 Required a. Benton receives a special order for 7,000 food processors for $20 each. Benton has excess ca Calculate the contribution margin per unit for the special order. Based on the contribution per unit, should Benton accept the special order? b. Support your answer by preparing a contribution margin income statement for the special o
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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100%

Transcribed Image Text:Exercise 6-7B.
+Exercise 6-9B Using the contribution margin approach for a special order decision
Benton Company produces and sells a food processor that it prices at a 32 percent markup on total
cost. Based on data pertaining to producing and selling 50,000 food processors, Benton computes the
sales price per food processor as follows.
Unit-level costs
$ 750,000
Fixed costs
500,000
$1,250,000
Total cost (a)
Markup (a x 0.32)
400,000
Total sales revenue (b)
$1,650,000
Sales price per unit (b 50,000)
2$
33.00
Required
Benton receives a special order for 7,000 food processors for $20 each. Benton has excess capacity.
Calculate the contribution margin per unit for the special order. Based on the contribution margin
per unit, should Benton accept the special order?
a.
b. Support your answer by preparing a contribution margin income statement for the special order.
Exercise 6-10B Making an outsourcing decision
Swartz Boats Company currently produces a battery used in manufacturing its boats. The company
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