Question

C U Eyewear Inc. can manufacture sunglasses for $28.50 per pair in raw material costs and $18.85 per pair in variable labor expense. The glasses sell for $155 per pair. Last year productions were 140,000 pairs. Fixed costs were $1,225,000.

a.) What was total production costs?

b.) What is the marginal costs per pair?

c.) What is the average costs?

d.) If the company is considering a one-time order for an extra 5,000 pairs. What is the minimum accepted total revenue from the order?

Answer 1