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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
Problem 1: 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 $3.75 per jar. Suppose this action will increase sales to 307,500 jars of sauce. What is the incremental revenue associated with the price reduction of sauce?
Weber Company purchases $44,000 of raw materials on account, and it incurs $53,460 of factory labor costs. Supporting records show that (a) the Assembly Department used $29,010 of raw materials and $33,300 of the factory labor, and (b) the Finishing ..
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