The company has 500 daks on hand that have some

Reference no: EM13598746

Andretti Company has a single product called a Dak. The company normally produces and sells 78,000 Daks each year at a selling price of $48 per unit. The company's unit costs at this level of activity are given below:

Direct materials $8.90
Direct labor 9.00
Variable manufacturing overhead 2.10
Fixed manufacturing overhead 5.00 ($390,000 total)
Variable selling expenses 1.50
Fixed selling expenses 6.60 ($514,800 total)
Total cost per unit $33.10

The company has 500 Daks on hand that have some irregularities and are therefore considered to be "seconds." Due to the irregularities, it will be impossible to sell these units at the normal price through regular distribution channels. What unit cost figure is relevant for setting a minimum selling price?

Reference no: EM13598746

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