121-2018SP-Reeder-OL (Jan to Mayl: Link to Cengage CengageNoWv2 1 Online teachin

Question

121-2018SP-Reeder-OL (Jan to Mayl: Link to Cengage CengageNoWv2 1 Online teaching and learning resource from Cengage Learning eBook Calculator Accepting Business at a Special Price 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 Direct labor Variable factory overhead Fixed factory overhead $162,500 70,000 30,000 112,500 $375,000 Total manufacturing costs 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 s anticipated that the additional activity will not interfere with normal production during July or increase the selling or administrative expenses. What is the unit cost below which Portable Power Company should not go in bidding on the government contract? Round your answer places. per unit Check My Work Previous Next All work saved Save and Exit Submit Assignment for Grading

Explanation / Answer

The answer is variable cost per unit which is (162500+70000+30000)/25000= 262500/25000= 10.5

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