Question
Question 7 Consider the production cost information for Mama Italiano Sauce given below: Mama Italiano Sauce Production Cost Budget April 2008 Production - Jars of
Question 7
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 303,000 jars of sauce. What is the incremental revenue associated with the price reduction of sauce?
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Financial And Managerial Accounting For School Administrators Tools For School
Authors: Ronald E. Everett, Donald R. Johnson, Bernard W. Madden
1st Edition
1578865816, 978-1578865819
