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Accepting Business at a Special Price Forever Ready Company expects to operate at 90% of productive capacity during May. The total manufacturing costs for May for the production of 34,200 batteries are budgeted as follows: Direct materials $546,500 Direct labor 200,900 Variable factory overhead 56,300 Fixed factory overhead 113,000 Total manufacturing costs $916,700 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

Accepting Business at a Special Price Forever Ready Company expects to operate at 90% of productive capacity during May. The total manufacturing costs for May for the production of 34,200 batteries are budgeted as follows: Direct materials $546,500 Direct labor 200,900 Variable factory overhead 56,300 Fixed factory overhead 113,000 Total manufacturing costs $916,700 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

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
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 90% of productive capacity during May. The total manufacturing costs for May for the production of 34,200 batteries are budgeted as follows: Direct materials $546,500 Direct labor 200,900 Variable factory overhead 56,300 Fixed factory overhead 113,000 Total manufacturing costs $916,700 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
Transcribed Image Text:Accepting Business at a Special Price Forever Ready Company expects to operate at 90% of productive capacity during May. The total manufacturing costs for May for the production of 34,200 batteries are budgeted as follows: Direct materials $546,500 Direct labor 200,900 Variable factory overhead 56,300 Fixed factory overhead 113,000 Total manufacturing costs $916,700 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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