7. Accepting Business at a Special Price

Accepting Business at a Special Price Power Serve Company expects to operate at 85% of productive capacity during May. The total manufacturing costs for May for the production of 28,050 batteries are budgeted as follows: Direct materials $280,400 Direct labor 103,100 Variable factory overhead 28,835 Fixed factory overhead 58,000 Total manufacturing costs $470,335 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 of administrative expenses. What is the unit cost below which Power Server Company should not go in bidding on the government contract? Round your answer to two decimal places. per unit