K-Too Everwear Corporation can manufacture mountain climbing shoes for $32.05 per pair in variable raw material costs and $23.00 per pair in variable labor expenses. The shoes sell for $142 per pair. Last year, production was 120,000 pairs. Fixed costs were $1,165,000. 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 order for an extra 5,000 pairs, what is the minimum acceptable total revenue from the order?

K-Too Everwear Corporation can manufacture mountain climbing shoes for $32.05 per pair in variable raw material costs and $23.00 per pair in variable labor expenses. The shoes sell for $142 per pair. Last year, production was 120,000 pairs. Fixed costs were $1,165,000. 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 order for an extra 5,000 pairs, what is the minimum acceptable total revenue from the order?

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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