Accepting Business at a Special Price Forever Ready Company expects to operate at 82% of productive capacity during May. The total manufacturing costs for May for the production of 33,620 batteries are budgeted as follows: Direct materials $436,700 Direct labor 160,500 Variable factory overhead 44,942 Fixed factory overhead 90,000 Total manufacturing costs $732,142 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 Forever Ready 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 Forever Ready Company expects to operate at 82% of productive capacity during May. The total manufacturing costs for May for the production of 33,620 batteries are budgeted as follows: Direct materials $436,700 Direct labor 160,500 Variable factory overhead 44,942 Fixed factory overhead 90,000 Total manufacturing costs $732,142 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 Forever Ready Company should not go in bidding on the government contract? Round your answer to two decimal places. $ per unit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Accepting Business at a Special Price
Forever Ready Company expects to operate at 82% of productive capacity during May. The total
| Direct materials | $436,700 |
| Direct labor | 160,500 |
| Variable factory |
44,942 |
| Fixed factory overhead | 90,000 |
| Total manufacturing costs | $732,142 |
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 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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