Richter Company has a single product called a Wim. The company normally produces and sells 60,000 Wims each year at a selling price of $40 per unit. The company’s unit costs at this level of activity are given below:
Direct labor 13.00
Variable manufacturing overhead 3.50
Fixed manufacturing overhead 6.00
Variable selling expenses 3.50
Fixed selling expenses 4.50
Total cost per unit$38.20
Assume that Richter Company has sufficient capacity to produce 72,000 Wims each year without any increase in fixed manufacturing overhead costs. The company could increase sales by 20% above the present 60,000 units each year if it were willing to increase the fixed selling expenses by $120,000.
4.The company has 500 Wims on hand that were produced last month and have small blemishes. Due to the blemishes, it will be impossible to sell these units at the normal price. If the company wishes to sell them through regular distribution channels, what unit cost figure is relevant for setting a minimum selling price? (Round your answer to 2 decimal places.)
Relevant unit cost:?