Consider the production cost information for Mama Italiano Sauce given below:
Mama Italian Sauce
Production Cost Budget
Production – Jars of sauce
Ingredient cost (variable)
Labor cost (variable)
The company is currently producing and selling jars of sauce The jars of sauce sell for $4 per jar. The company is considering lowering the price to $3.70 per jar. Suppose this action will increase sales. What is the incremental costs associated with producing an extra 59,000 jars of sauce?
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