The company produces and sells athletic shoes for children. The costs associated with each pair of shoes are estimated to be $14 of variable costs and $5 of fixed costs. The shoes normally sell for $35 per pair. A local children’s athletic league has offered to buy 100 pairs of shoes for $19 each. The company has excess capacity.  How much additional revenue would be earned if they accept the offer?

Q: what is the incremental effect on the company’s net income?

A:

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Q: break-even point?

A: Break even point in units = Fixed cost / Contribution margin per unit

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A:

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Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.