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(Ignore the $43,600. That was my incorrect attempt.) Accepting Business at a Special Price Forever Ready Company expects to operate at 88% of productive capacity
(Ignore the $43,600. That was my incorrect attempt.)
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 31,680 batteries are budgeted as follows: Direct materials $493,300 Direct labor 181,400 Variable factory overhead 50,772 Fixed factory overhead 102,000 Total manufacturing costs $827,472 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. 43,600 x per unitStep by Step Solution
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