Problem:

K-Too Everwear Corporation can manufacture mountain climbing shoes for $16.95 per pair in variable raw material costs and $17.35 per pair in variable labor expense. The shoes sell for $80 per pair. Last year, production was 140,000 pairs. Fixed costs were $800,000.

Question 1: What were total production costs?

Question 2: What is the marginal cost per pair?

Question 3: What is the average cost?

Question 4: If the company is considering a one-time order for an extra 7,000 pairs, what is the minimum acceptable total revenue from the order?

Note: Please explain comprehensively and give step by step solution.