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What is the incremental cost associated

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

Sheridan's Salsa Production Costs April 2020

Production 28,000

Jars of Salsa Ingredient cost (variable) $22,400

Labor cost (variable) 11,200

Rent (fixed) 5,100

Depreciation (fixed 7,600

Other (fixed) 1,600

Total $47,900

The company is currently producing and selling 364,000 jars of salsa annually. The jars sell for $8.00 each. The company is considering lowering the price to $7.50. Suppose this action will increase sales to 420,000 jars.

Required - What is the incremental cost associated with producing an extra 56,000 jars of salsa?

Reference no: EM133035564

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