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acb246
Jan 26, 2009, 09:42 AM
Santiago's Salsa is currently producing and selling 250,000 jars of salsa annually. Fixed costs total $132,000. Variable coasts total $312,500. The jars sell for $4.00 each. The company is considering lowering the price to $3.70. Suppose this action will increase sales to 300,000 jars.

a.) What is the incremental cost associated with producing an extra 50,000 jars of salsa?

b.) What is the incremental revenue associated with the price reduction of $0.30 per jar?

c.) What is the incremental profit or loss if 300,000 jars are sold?
Curlyben
Jan 26, 2009, 10:40 AM
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