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What is the incremental costs associated with producing

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Reference no: EM132053841

The 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

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 59,000 jars of sauce?

Reference no: EM132053841

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