Company has an opportunity to submit a bid

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Reference no: EM13925039

Accepting Business at a Special Price

Power Serve Company expects to operate at 90% of productive capacity during May. The total manufacturing costs for May for the production of 31,500 batteries are budgeted as follows:

Direct materials $321,300
Direct labor 118,100
Variable factory overhead 33,100
Fixed factory overhead 66,000
Total manufacturing costs $538,500

The company has an opportunity to submit a bid for 1,000 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.

Reference no: EM13925039

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