Response to the following problem:
Santiago's Salsa Production Costs for 25,000 Jars
Ingredient Cost (variable) $20,000
Labor Cost (variable) $12,000
Consider the production cost information above. The company is currently producing and selling 325,000 jars of salsa annually. The jars sell for $5.00. The company is considering lowering the price to $4.60. Suppose this action will increase sales to 375,000 jars.
What is the incremental cost associated with producing an extra 50000 jars of salsa?