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Wildhorse's Salsa Production Costs April 2020 27,000 Production Jars of Salsa Ingredient cost (variable) $24,300 Labor cost (variable) 11,340 Rent (fixed) 5,300 Depreciation (fixed) 7,400

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Wildhorse's Salsa Production Costs April 2020 27,000 Production Jars of Salsa Ingredient cost (variable) $24,300 Labor cost (variable) 11,340 Rent (fixed) 5,300 Depreciation (fixed) 7,400 Other (fixed) 1,600 Total $49,940 The company is currently producing and selling 405,000 jars of salsa annually. The jars sell for $6.00 each. The company is considering lowering the price to $5.50. Suppose this action will increase sales to 459,000 jars. (a) What is the incremental cost associated with producing an extra 54,000 jars of salsa? Incremental Cost $

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