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: unit-level costs $ 276,000 fixed costs 60,000 total cost (a) 336,000 markup (a × 0.25) 84,000 total sales (b) $ 420,000 sales price per unit (b ÷ 12,000) $ 35 required 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?

Xinhong company is considering replacing one of its manufacturing machines. the machine has a book value of $39,000 and a remaining useful life of 5 years, at which time its salvage value will be zero. it has a current market value of $49,000. variable manufacturing costs are $33,300 per year for this machine. information on two alternative replacement machines follows. alternative a alternative b cost $ 115,000 $ 117,000 variable manufacturing costs per year 22,900 10,100 1. calculate the total change in net income if alternative a and b is adopted. 2. should xinhong keep or replace its manufacturing machine