Accepting Business at a Special Price Power Serve Company expects to operate at 82% of...
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Accounting
Accepting Business at a Special Price
Power Serve Company expects to operate at 82% of productive capacity during July. The total manufacturing costs for July for the production of 34,440 batteries are budgeted as follows:
| Direct materials | $409,800 |
| Direct labor | 150,700 |
| Variable factory overhead | 42,200 |
| Fixed factory overhead | 84,000 |
| Total manufacturing costs | $686,700 |
The company has an opportunity to submit a bid for 3,000 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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