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Mama Italiano Sauce Production Cost Budget




Question;Mama Italiano SauceProduction Cost BudgetApril 2008Production - Jars of sauce 20,000Ingredient cost (variable) $16,000Labor cost (variable) 9,000Rent (fixed) 4,000Depreciation (fixed) 6,000Other (fixed) 1,000Total $36,000The company is currently producing and selling 250,000 jars of sauce annually. The jars of sauce sell for $4 per jar. The company is considering lowering the price to $3.75 per jar. Suppose this action will increase sales to 319,500 jars of sauce. What is the incremental revenue associated with the price reduction of sauce?


Paper#43152 | Written in 18-Jul-2015

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