v2.cengagenow.com 1-2018SP-Reeder-OL Jan to May): Link to Cengage CengageNowv2 |
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v2.cengagenow.com 1-2018SP-Reeder-OL Jan to May): Link to Cengage CengageNowv2 | Onilin e teaching and learning resource from Cengage Learning eBook Accepting Business at a Special Price Forever Ready Company expects to operate at 82% of productive capacity during July. The total manufacturing costs for July for the production of 28,700 batteries are budgeted as follows: Direct materials Direct labor Variable factory overhead $462,500 170,000 47,690 95,000 $775,190 Fixed factory overhead Total manufacturing costs The company has an opportunity to submit a bid for 3,000 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 ? ) 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 per unit Check My Work Previous Next All work saved. Save and Exit Submit Assignment for GradingExplanation / Answer
Unit cost below which Portable Power Company should not go in bidding on the government contract = $23.70
Direct materials (462,500 / 28700) = $16.11
Direct labor (1,70,000 / 28,700 ) = $5.92
Variable factory overhead (47,690 / 28,700) = $1.67
Total cost per unit = $23.70
Or
Add all the costs for 28700 (Excluding fixed FOH) / 28700
= ($4,62,500 + $1,70,000 + $47,690) / 28700
= $6,80,190 / 28700
= $23.70
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