Problem 11-2 Computing Average Cost [LO3]

K-Too Everwear Corporation can manufacture mountain climbing shoes for $25.90 per pair in variable raw material costs and $17.15 per pair in variable labor expense. The shoes sell for $150 per pair. Last year, production was 160,000 pairs. Fixed costs were $1,225,000.

a.	What were total production costs? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
b.	What is the marginal cost per pair? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
c.	What is the average cost per pair? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
d.	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? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

a.	Total production cost
b.	Marginal cost per pair
c.	Average cost per pair
d.	Minimum total revenue