Accepting Business at a Special Price Forever Ready Company expects to operate at 85% of...
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Accounting
Accepting Business at a Special Price
Forever Ready Company expects to operate at 85% of productive capacity during May. The total manufacturing costs for May for the production of 33,150 batteries are budgeted as follows:
Direct materials
$263,700
Direct labor
97,000
Variable factory overhead
27,155
Fixed factory overhead
54,000
Total manufacturing costs
$441,855
The company has an opportunity to submit a bid for 2,000 batteries to be delivered by May 31 to a government agency. If the contract is obtained, it is anticipated that the additional activity will not interfere with normal production during May or increase the selling or administrative expenses.
What is the unit cost below which Forever Ready Company should not go in bidding on the government contract? Round your answer to two decimal places. $ per unit
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