Question
The production cost information for Cullumbers Salsa is as follows: Cullumbers Salsa Production Costs April 2020 Production 21,000 Jars of Salsa Ingredient cost (variable) $16,800
The production cost information for Cullumbers Salsa is as follows: Cullumbers Salsa Production Costs April 2020 Production 21,000 Jars of Salsa Ingredient cost (variable) $16,800 Labor cost (variable) 9,660 Rent (fixed) 4,600 Depreciation (fixed) 6,000 Other (fixed) 1,800 Total $38,860 The company is currently producing and selling 273,000 jars of salsa annually. The jars sell for $6.00 each. The company is considering lowering the price to $5.30. Suppose this action will increase sales to 336,000 jars. (a) What is the incremental cost associated with producing an extra 63,000 jars of salsa? Incremental Cost $enter incremental cost in dollar What is the incremental revenue associated with the price reduction of $0.70 per jar? Incremental Revenue $enter incremental revenue in dollar.
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