Consider the production cost information for Mama Italiano Sauce given below: Ma
ID: 2643316 • Letter: C
Question
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 50,750 jars of sauce?
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
Explanation / Answer
Hello Pal,
First of all a very nice as well as intersting question from your side.
So now straight to the question, as asked above with all the information available from your side and from mine, the answer is as under:
After calculation of the above given information, we can conclude that the answer or the incremental costs associated will be $91350.
That is all I can say from the above given information by you, hope have solved your problem to some extent.
Regards.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.