Business, 27.12.2020 15:30 hasshh

Portable Power Company expects to operate at 80% of productive capacity during July. The total manufacturing costs for July for the production of 25,000 batteries are budgeted as follows: Direct materials $162,500
Direct labor 70,000
Variable factory overhead 30,000
Fixed factory overhead 112,500
Total manufacturing costs $375,000

The company has an opportunity to submit a bid for 2,500 batteries to be delivered by July 31 to a government agency. If the contract is obtained, it is anticipated that the additional activity will not interfere with normal production during July or increase the selling or administrative expenses.

Required:
What is the unit cost below which Portable Power Company should not go in bidding on the government contract?

Answers: 2

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Portable Power Company expects to operate at 80% of productive capacity during July. The total manuf...