Special Order Tobitzu TV produces wall mounts for flat panel television sets. The forecasted income...
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Special Order Tobitzu TV produces wall mounts for flat panel television sets. The forecasted income statement for 2009 is as follows: TOBITZU TV Budgeted Income Statement For the Year 2009 Sales ($41 per unit) $4,100,000 Cost of good sold ($32 per unit) (3,200,000) Gross profit 900,000 Selling expenses ($2 per unit) (200,000) Net income $700,000 Additional Information (1) Of the production costs and selling expenses, $700,000 and $100,000, respectively, are fixed. (2) Tobitzu TV received a special order from a hospital supply company offering to buy 14,000 wall mounts for $29. If it accepts the order, there will be no additional fixed selling expenses, and there is currently sufficient excess capacity to fill the order. The company's sales manager argues for rejecting the order because "we are not in the business of paying $32 to make a product to sell for $29."
Compute the contribution per unit and total contribution for the special order. Contribution per unit. Note: Round answer to two decimal places.
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