What is incremental cost associated with producing extra jar

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Reference no: EM133111372

Question - The production cost information for Blossom's Salsa is as follows:

Blossom's Salsa Production Costs April 2020

Production

23,000
Jars of Salsa

Ingredient cost (variable)

$13,800

Labor cost (variable)

9,660

Rent (fixed)

4,300

Depreciation (fixed)

6,000

Other (fixed)

1,400

Total

$35,160

The company is currently producing and selling 345,000 jars of salsa annually. The jars sell for $7.00 each. The company is considering lowering the price to $6.30. Suppose this action will increase sales to 391,000 jars.

Required - What is the incremental cost associated with producing an extra 46,000 jars of salsa?

Reference no: EM133111372

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