Accepting business at a special price Power Serve Company expects to operate at 85% of productive capacity during May. The total manufacturing costs for May for the production of 34,850 batteries are budgeted as follows: Direct materials Direct labor $395,800 145,500 Variable factory overhead 40,695 Fixed factory overhead Total manufacturing costs 81,000 $662,995 The company has an opportunity to submit a bid for 3,000 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 Power Serve Company should not go in bidding on the government contract? Round your answer to two decimal places. per unit

Accepting business at a special price Power Serve Company expects to operate at 85% of productive capacity during May. The total manufacturing costs for May for the production of 34,850 batteries are budgeted as follows: Direct materials Direct labor $395,800 145,500 Variable factory overhead 40,695 Fixed factory overhead Total manufacturing costs 81,000 $662,995 The company has an opportunity to submit a bid for 3,000 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 Power Serve Company should not go in bidding on the government contract? Round your answer to two decimal places. per unit

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 14E: Accepting business at a special price Box Elder Power Company expects to operate at 85% of...

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