Rosario Company, which is located in Buenos Aires, Argentina, manufactures a component used in farm machinery. The firm's fixed costs are 3,400,000 p per year. The variable cost of each component is 1,900 p, and the components are sold for 3,900 p each. The company sold 5,700 components during the prior year. (p denotes the peso, Argentina's national currency. Several countries use the peso as their monetary unit. On the day this exercise was written, Argentina's peso was worth US$0.104. In the following requirements, ignore income taxes.)
Rosario Company, which is located in Buenos Aires, Argentina, manufactures a component used in farm machinery. The firm's fixed costs are 3,400,000 p per year. The variable cost of each component is 1,900 p, and the components are sold for 3,900 p each. The company sold 5,700 components during the prior year. (p denotes the peso, Argentina's national currency. Several countries use the peso as their monetary unit. On the day this exercise was written, Argentina's peso was worth US$0.104. In the following requirements, ignore income taxes.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
1. Compute the break-even point in units.
2. What will the new break-even point be if fixed costs increase by 15 percent?
Round answer to the nearest whole number.

Transcribed Image Text:5. Should the price change discussed in requirement 4 be made?
1. Break-even point
2. New break-even point
3. Net income
4. New break-even point
components
5. Should the price change discussed in requirement 4 be made?
components
components
р

Transcribed Image Text:Rosario Company, which is located in Buenos Aires, Argentina, manufactures a component used in farm machinery. The firm's fixed
costs are 3,400,000 p per year. The variable cost of each component is 1,900 p, and the components are sold for 3,900 p each. The
company sold 5,700 components during the prior year. (p denotes the peso, Argentina's national currency. Several countries use the
peso as their monetary unit. On the day this exercise was written, Argentina's peso was worth US$0.104. In the following requirements,
ignore income taxes.)
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