ACC - Mama Italiano Sauce
Question # 00019457
Posted By:
Updated on: 07/08/2014 11:29 PM Due on: 07/09/2014
Consider the production cost information for Mama Italiano Sauce given below:
Mama Italian 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 jars of sauce The jars of sauce sell for $4 per jar. The company is considering lowering the price to $3.70 per jar. Suppose this action will increase sales. What is the incremental costs associated with producing an extra 65,750 jars of sauce?
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Rating:
/5
Solution: ACC - Mama Italiano Sauce Solution