Problem:
K-Too Everwear Corporation can manufacture mountain climbing shoes for $31.90 per pair in variable raw material costs and $22.85 per pair in variable labor expense. The shoes sell for $124 per pair. Last year, production was 100,000 pairs. Fixed costs were $1,030,000.
Requirement:
Question 1: What were total production costs?
Question 2: What is the marginal cost per pair?
Question 3: What is the average cost per pair?
Question 4: If the company is considering a one-time order for an extra 8,000 pairs, what is the minimum acceptable total revenue from the order?
Note: Please show basic calculation