Question

K-Too Everwear corporation can manufacture mountain climbing shoes for $35.85 per pair in variable raw material costs and $26.45 per pair in variable labor expense. The shoes sell for $165 per pair. Last year, production was 145,000 pairs. Fixed costs were $1,750,000. What were total production costs?

Answer 1

Answer:

$10,783,500

Explanation:

For determining the total production costs first we need to find out the variable cost per unit which is shown below:-

Variable cost per pair = Variable raw material cost per pair + Variable labor expense per pair

= $35.85 + $26.45

= $62.30

Total production costs = Variable cost per pair × Number of pairs produced + Fixed costs

= $62.30 × 145,000 + $1,750,000

= $9033500 + $1,750,000

= $10,783,500