K-Too Everwear Corporation can manufacture mountain climbing shoes for $11 per pair in variable raw material costs and $13.34 per pair in variable labor expense. The shoes sell for $126 per pair. Lastyear, production was 180,000 pairs. Fixed costs were $780,000. 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 aone-time order for an extra 13, 000 pairs, what is the minimum acceptable total revenue from the order?

The production costs indicate the total of costs associated in the process of making product readily…

Answered: K-Too Everwear Corporation can…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Elroy Racers makes bicycles. It has always purchased its bicycle tires from the M. Wilson Tires at $25 each but is currently considering making the tires in its own factory. The estimated costs per unit of making the tires are as follows: Direct materials $8 Direct labor $5 Variable manufacturing overhead $7 The company’s fixed expenses would increase by $60,000 per year if managers decided to make the tire.(b)What qualitative factors should Elroy Racers consider in making this decision?
asmin Co. can further process Product B to produce Product C. Product B is currently selling for $34 per pound and costs $29 per pound to produce. Product C would sell for $62 per pound and would require an additional cost of $25 per pound to produce. What is the differential cost of producing Product C? a.$25 per pound b.$62 per pound c.$34 per pound d.$29 per pound
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