Question

K-Too Everwear Corporation can manufacture mountain climbing shoes for $43.03 per pair in variable raw material costs and $25.45 per pair in variable labor expense. The shoes sell for $140 per pair. Last year, production was 110,000 pairs. Fixed costs were $1,150,000. What were total production costs?

Answer 1

Answer:

$8,682,800

Explanation:

Data provided in the question:

Variable raw material cost = $43.03 per pair

Variable labor expense = $25.45 per pair

Thus,

Total variable cost = $43.03 + $25.45

= $68.48 per pair

Selling price of the share = $140 per pair

Production = 110,000

Fixed cost = $1,150,000

Now,

The total cost of production = Total variable cost + Total fixed cost  

= ( $68.48 × 110,000 ) + $1,150,000

= $7,532,800 + $1,150,000

= $8,682,800