Question
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
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 321,000 jars of sauce. What is the incremental revenue associated with the price reduction of sauce?
Round to two decimal places.
Your Answer:
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Organizational Network Analysis Auditing Intangible Resources
Authors: Anna Ujwary-Gil
1st Edition
1032085215, 978-1032085210
