The production cost information for Blossom's Salsa is as follows: Blossom's...
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Accounting
The production cost information for Blossom's Salsa is as follows:
Blossom's SalsaProduction CostsApril 2020
Production
23,000Jars of Salsa
Ingredient cost (variable)
$13,800
Labor cost (variable)
9,660
Rent (fixed)
4,300
Depreciation (fixed)
6,000
Other (fixed)
1,400
Total
$35,160
The company is currently producing and selling 345,000 jars of salsa annually. The jars sell for $7.00 each. The company is considering lowering the price to $6.30. Suppose this action will increase sales to 391,000 jars.
(a)
What is the incremental cost associated with producing an extra 46,000 jars of salsa?
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