Power Serve Company expects to operate at 85% of productive capacity during May. The total manufacturing costs for May for the production of 35,700 batteries are budgeted as follows: Direct materials $507,400 Direct labor 186,500 Variable factory overhead 52,230 Fixed factory overhead 104,000 Total manufacturing costs $850,130 The company has an opportunity to submit a bid for 3,000 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.