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 $3.70 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"