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Anderson Footwear Ltd. produces high-performance hiking boots. Each pair requires $34.80 in variable raw material costs and $24.60 in variable labor expenses. The boots sell for $168 per pair. Last year, the company produced 95,000 pairs. Fixed costs for the year were $1,460,000. Required: a. What were total production costs? b. What is the marginal cost per pair? c. What is the average cost per pair? d. If the company is considering a one-time special order for an additional 6,000 pairs, what is the minimum acceptable total revenue from the order?

Anderson Footwear Ltd. produces high-performance hiking boots. Each pair requires $34.80 in variable raw material costs and $24.60 in variable labor expenses. The boots sell for $168 per pair. Last year, the company produced 95,000 pairs. Fixed costs for the year were $1,460,000. Required: a. What were total production costs? b. What is the marginal cost per pair? c. What is the average cost per pair? d. If the company is considering a one-time special order for an additional 6,000 pairs, what is the minimum acceptable total revenue from the order?

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter7: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 58P: Polaris Inc. manufactures two types of metal stampings for the automobile industry: door handles and...
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Anderson Footwear Ltd. produces high-performance hiking boots. Each pair requires $34.80 in variable raw material costs and $24.60 in variable labor expenses. The boots sell for $168 per pair. Last year, the company produced 95,000 pairs. Fixed costs for the year were $1,460,000. Required: a. What were total production costs? b. What is the marginal cost per pair? c. What is the average cost per pair? d. If the company is considering a one-time special order for an additional 6,000 pairs, what is the minimum acceptable total revenue from the order?

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