9. Accepting Business at a Special Price Power Serve Company expects to operate...
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Accounting
9.
Accepting Business at a Special Price Power Serve Company expects to operate at 90% of productive capacity during July. The total manufacturing costs for July for the production of 40,500 batteries are budgeted as follows: Direct materials $658,200 Direct labor 242,000 Variable factory overhead 67,750 Fixed factory overhead 136,000 Total manufacturing costs $1,103,950 The company has an opportunity to submit a bid for 2,000 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 Serve Company should not go in bidding on the government contract? Round your answer to two decimal places. per unit
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