Question
The production cost information forSheridan's Salsa is as follows: Sheridan's Salsa Production Costs April 2020 Production 28,000 Jars of Salsa Ingredient cost (variable)$22,400 Labor cost
The production cost information forSheridan's Salsa is as follows:
Sheridan's Salsa
Production Costs
April 2020
Production 28,000
Jars of Salsa
Ingredient cost (variable)$22,400
Labor cost (variable) 11,200
Rent (fixed) 5,100
Depreciation (fixed 7,600
Other (fixed) 1,600
Total $47,900
The company is currently producing and selling364,000jars of salsa annually. The jars sell for $8.00each. The company is considering lowering the price to $7.50. Suppose this action will increase sales to420,000jars.
(a)
What is the incremental cost associated with producing an extra56,000jars of salsa?
Incremental Cost $
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Managerial Accounting
Authors: Karen W. Braun, Wendy M. Tietz
7th Edition
0137858515, 9780137858514
