Question
Carla Vista's Salsa Production Costs April 2020 Production 30,000 Jars of Salsa Ingredient cost (variable)$27,000 Labor cost (variable)14,400 Rent (fixed)4,300 Depreciation (fixed)6,200 Other (fixed)1,900 Total$53,800
Carla Vista's Salsa
Production Costs
April 2020
Production 30,000 Jars of Salsa
Ingredient cost (variable)$27,000
Labor cost (variable)14,400
Rent (fixed)4,300
Depreciation (fixed)6,200
Other (fixed)1,900
Total$53,800
The company is currently producing and selling420,000jars of salsa annually. The jars sell for $6.00each. The company is considering lowering the price to $5.50. Suppose this action will increase sales to480,000jars.
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What is the incremental cost associated with producing an extra60,000 jars of salsa?
Incremental Cost is $$82,800
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What is the incremental revenue associated with the price reduction of $0.50per jar?
Incremental Revenue? = $????? (Please show work)
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Accounting, The Financial Chapters
Authors: Tracie Miller Nobles
12th Edition
013449041X, 9780134490410
