Located in a small town in upstate New York, Terry’s Bakery operates a facility that makes pies for retail sale. The facility has the capacity to make 36,000 pies annually. The plant has only two customers, Panama Food Mart and East Street Coffee. Annual orders for Panama total 18,000 pies, and annual orders for East Street total 9,000 pies. Terry’s makes the pies fresh every day and carries no inventory. It also ensures that the customers only sell freshly made pies as well. Variable manufacturing costs are $4.20 per pie, and annual fixed manufacturing costs are $97,200.

Required

What cost per pie should the cost system report? Why? If you need more information to answer the question, describe it.