11

K-Too Everwear Corporation can manufacture mountain climbing shoes for $10.3 per pair in variable raw material costs and $16.52 per pair in variable labor expense. The shoes sell for $87 per pair. Last year, production was 150,000 pairs. Fixed costs were $700,000.

a. What were total production costs?

b. What is the marginal cost per pair?

c. What is the average cost?

d. If the company is considering a one-time order for an extra 9,000 pairs, what is the minimum acceptable total revenue from the order?