Accepting Business at a Special Price Forever Ready Company expects to operate at 88% of productive capacity during May. The total manufacturing costs for May for the production of 38,720 batteries are budgeted as follows: Direct materials Direct labor Variable factory overhead Fixed factory overhead Total manufacturing costs $492,400 181,000 50,664 101,000 $825,064 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 88% of productive capacity during May. The total manufacturing costs for May for the production of 38,720 batteries are budgeted as follows: Direct materials Direct labor Variable factory overhead Fixed factory overhead Total manufacturing costs $492,400 181,000 50,664 101,000 $825,064 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
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Accepting Business at a Special Price
Forever Ready Company expects to operate at 88% of productive capacity during May. The total manufacturing costs for May for the production of 38,720 batteries are budgeted as
follows:
$492,400
181,000
50,664
101,000
$825,064
Direct materials
Direct labor
Variable factory overhead
Fixed factory overhead
Total manufacturing costs
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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