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?
Mama Italiano Sauce Production Cost Budget
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