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What is the incremental cost associated with producing extra

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Reference no: EM132573408

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

Question 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 53,750 jars of sauce?

Round to two decimal places.

Reference no: EM132573408

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