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

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

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 313,500 jars of sauce. What is the incremental revenue associated with the price reduction of sauce?

Looking for a Similar Assignment? Order now and Get 10% Discount! Use Coupon Code "Newclient"