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

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 68,000 jars of sauce?

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