Revenue associated with the price reduction of sauce

Assignment Help Financial Management

Reference no: EM132016063

Consider the production cost information for Mama Italiano Sauce given below: Mama Italiano Sauce Production Cost Budget April 2008 Production - Jars of sauce 20,000 Ingredient cost (variable) $16,000 Labor cost (variable) 9,000 Rent (fixed) 4,000 Depreciation (fixed) 6,000 Other (fixed) 1,000 Total $36,000 The company is currently producing and selling 250,000 jars of sauce annually. The jars of sauce sell for $4 per jar. The company is considering lowering the price to $3.60 per jar. Suppose this action will increase sales to 310,500 jars of sauce. What is the incremental revenue associated with the price reduction of sauce?

Reference no: EM132016063

Questions Cloud

What is the present value of your settlement : This sum will be paid out as $50,000 per year for each of the next ten years. what is the present value of your settlement?

Determine the amount of net operating income : Determine the amount of net operating income that would result of a hospital whose pay mix and expected volume (100 cases) is as follows:

Interest rate and quarterly compounding : Assuming a 6% interest rate and quarterly compounding, how much will a $5,000 investment be worth in nine years?

What is the current value of bonds : Ten years ago Franky Frugal bought some 20-year treasury bonds for $200,000. What is the current value of his bonds? $

Revenue associated with the price reduction of sauce : What is the incremental revenue associated with the price reduction of sauce?

Straight-lined over the life of the issue : Flotation costs on the new issue will also be straight-lined over the life of the issue. Find the NPV of refunding.

Consider the production cost information : Consider the production cost information for Mama Italiano Sauce given below: Mama Italian Sauce Production Cost Budget April 2008.

What is the rate of return from this investment : Assuming that the required rate of return remained at 8%, what would the selling price be? What is the rate of return from this investment?

Calculate the copy department costs allocated to sales : Triton Company's copy department, calculate the copy department costs allocated to sales.

User Account

All Pages