Power Serve Company expects to operate at 85% of productive capacity during May. The total manufacturing costs for May for the production of 28,050 batteries are budgeted as follows: Direct materials $272,800 Direct labor 100,300 Variable factory overhead 28,015 Fixed factory overhead 56,000 Total manufacturing costs $457,115 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 Power Serve Company should not go in bidding on the government contract? Round your answer to two decimal places. per unit

Power Serve Company expects to operate at 85% of productive capacity during May. The total manufacturing costs for May for the production of 28,050 batteries are budgeted as follows: Direct materials $272,800 Direct labor 100,300 Variable factory overhead 28,015 Fixed factory overhead 56,000 Total manufacturing costs $457,115 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 Power Serve Company should not go in bidding on the government contract? Round your answer to two decimal places. per unit

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 Power Serve Company expects to operate at 82% of productive capacity during May. The total manufacturing costs for May for the production of 31,980 batteries are budgeted as follows: Direct materials Direct labor Variable factory overhead Fixed factory overhead Total manufacturing costs 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. $458,800 168,700 47,278 94,000 $768,778 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