Sterling Auto Detail is currently open Monday through Friday. In the past year, income before taxes was as follows:
Numbers of cars detailed
Less operating expenses:
Supplies (polish, wax, etc.)
Salaries of detailers
Water and other variable costs
Other fixed costs
Income before taxes
Quincy Davis, the owner of Sterling, is considering extending the workweek through Saturday. If he takes this action, he’ll hire a part-time employee for $300 per day to act as the Saturday manager so the supervisor still can have Saturday off. Quincy estimates that his company will detail an additional 10 cars per Saturday, 52 weeks per year
Calculate the annual incremental revenue associated with being open on Saturday.
Annual incremental revenue
$enter a annual incremental revenue in dollar
The production cost information for Carla Vista’s Salsa is as follows:
Carla Vista’s Salsa Production Costs April 2020
30,000 Jars of Salsa
Ingredient cost (variable)
Labor cost (variable)
The company is currently producing and selling 420,000 jars of salsa annually. The jars sell for $6.00 each. The company is considering lowering the price to $5.50. Suppose this action will increase sales to 480,000 jars.
What is the incremental cost associated with producing an extra 60,000 jars of salsa?
$enter incremental cost in dollar
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