Andretti Company has a single product called a Dak. The company normally produces and sells 60,000 Daks each year at a selling price of $32 per unit. The companys unit costs at this level of activity are given below:

Direct materials	$10.00
Direct labor	4.50
Variable manufacturing overhead	2.30
Fixed manufacturing overhead	5.00 ($300,000 total)
Variable selling expenses	1.20
Fixed selling expenses	3.50($210,000 total)
Total cost per unit	$26.50

A number of questions relating to the production and sale of Daks follow. Each question is independent.

1. The company has 1,000 Daks on hand that have some irregularities and are therefore considered to be seconds. Due to the irregularities, it will be impossible to sell these units at the normal price through regular distribution channels. What is the unit cost figure that is relevant for setting a minimum selling price? Explain.