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K-Too Everwear Corporation can manufacture mountain climbing shoes for $11.5 per pair in variable raw material costs and $18.12 per pair in variable labor expense. The shoes sell for $97 per pair. Last year, production was 140,000 pairs. Fixed costs were $750,000.

Required:

(a) What were total production costs? (Do not round your intermediate calculations.)

(b) What is the marginal cost per pair? (Do not round your intermediate calculations.)

(c) What is the average cost? (Do not round your intermediate calculations.)

(d) If the company is considering a one-time order for an extra 13,000 pairs, what is the minimum acceptable total revenue from the order? (Do not round your intermediate calculations.)

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M91590172

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