What is the incremental revenue associated with the price reduction of sauce

timer Asked: Oct 30th, 2015

Question description

Consider the production cost information for Mama Italiano Sauce given below:

Mama Italiano Sauce

Production Cost Budget

April 2008

Production - Jars of sauce


Ingredient cost (variable)


Labor cost (variable)


Rent (fixed)


Depreciation (fixed)


Other (fixed)




The 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 $3.60 per jar.  Suppose this action will increase sales to 313,500 jars of sauce.  What is the incremental revenue associated with the price reduction of sauce?

Tutor Answer

(Top Tutor) Studypool Tutor
School: Boston College
Studypool has helped 1,244,100 students
flag Report DMCA
Similar Questions
Hot Questions
Related Tags
Study Guides

Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors