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What is incremental costs associated with producing extra

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Reference no: EM132938203

Consider the production cost information for Mama Italiano Sauce given below:

Mama Italian 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

Problem 1: The company is currently producing and selling jars of sauce The jars of sauce sell for $4 per jar. The company is considering lowering the price to $3.70 per jar. Suppose this action will increase sales. What is the incremental costs associated with producing an extra 54,500 jars of sauce?

Reference no: EM132938203

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