Problem
K-Too Everwear Corporation can manufacture mountain climbing shoes for $25.85 per pair in variable raw material costs and $17.10 per pair in variable labor expense. The shoes sell for $144 per pair. Last year, production was 130,000 pairs. Fixed costs were $1,180,000. What were total production costs? What is the marginal cost per pair? What is the average cost per pair? If the company is considering a one-time order for an extra 4,000 pairs, what is the minimum acceptable total revenue from the order?