Accepting Business at a Special Price Power Pack Company expects to operate at 80% of productive capacity during July. The total manufacturing costs for July for the production of 45,000 batteries are budgeted as follows: Direct materials $375,000 Direct labor 160,750 Variable factory overhead 71,750 Fixed factory overhead 261,250 Total manufacturing costs $868,750 The company has an opportunity to submit a bid for 4,500 batteries to be delivered by July 31 to a government agency. If the contract is obtained, it is anticipated that the additional activity will not interfere with normal production during July or increase the selling or administrative expenses. What is the unit cost below which Power Pack Company should not go in bidding on the government contract? Round your answer to two decimal
Accepting Business at a Special Price Power Pack Company expects to operate at 80% of productive capacity during July. The total manufacturing costs for July for the production of 45,000 batteries are budgeted as follows: Direct materials $375,000 Direct labor 160,750 Variable factory overhead 71,750 Fixed factory overhead 261,250 Total manufacturing costs $868,750 The company has an opportunity to submit a bid for 4,500 batteries to be delivered by July 31 to a government agency. If the contract is obtained, it is anticipated that the additional activity will not interfere with normal production during July or increase the selling or administrative expenses. What is the unit cost below which Power Pack Company should not go in bidding on the government contract? Round your answer to two decimal
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Accepting Business at a Special Price
Power Pack Company expects to operate at 80% of productive capacity during July. The total
| Direct materials | $375,000 |
| Direct labor | 160,750 |
| Variable factory |
71,750 |
| Fixed factory overhead | 261,250 |
| Total manufacturing costs | $868,750 |
The company has an opportunity to submit a bid for 4,500 batteries to be delivered by July 31 to a government agency. If the contract is obtained, it is anticipated that the additional activity will not interfere with normal production during July or increase the selling or administrative expenses.
What is the unit cost below which Power Pack Company should not go in bidding on the government contract? Round your answer to two decimal
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