Business, 11.05.2021 16:10, jxgcyttigfccvn8087
Accepting Business at a Special Price Power Serve Company expects to operate at 85% of productive capacity during July. The total manufacturing costs for July for the production of 33,150 batteries are budgeted as follows:
Direct materials $342,600
Direct labor 126,000
Variable factory overhead 35,280
Fixed factory overhead 71,000
Total manufacturing costs $574,880
The company has an opportunity to submit a bid for 2,000 batteries to be delivered by July 31 to a government agency. If the contract is obtained, it is anticipated that the additional activity will not interfere with normal production during July or increase the selling or administrative expenses. What is the unit cost below which Power Serve Company should not go in bidding on the government contract?
Answers: 3
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