K-Too Everwear Corporation can manufacture mountain climbing shoes for $42.88 pe

Question

K-Too Everwear Corporation can manufacture mountain climbing shoes for $42.88 per pair in variable raw material costs and $25.30 per pair in variable labor expense. The shoes sell for $122 per pair. Last year, production was 90,000 pairs. Fixed costs were $1,015,000.

  
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 6,000 pairs, what is the minimum acceptable total revenue from the order?

Explanation / Answer

total production cost = fixed +variable

=$1,015,000.+90000($42.88+$25.30)

marginal cost = dtc/ dq=

average cost= total cost / total quantity =$1,015,000.+90000($42.88+$25.30)/(90000)

revenue from the order = price (quantity)=6000(122)

Related Questions

Navigate

• Browse (All)
• Browse K
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.