EX $7-25($Algo$)$ Manufacturing; Using CVP Analysis $($LO $7-1,7-4)$

Rosario Company, which is located in Buenos Alres, Argentina, manufactures a component used in farm machinery. The firm's

fixed costs are $4,000,000$ p per year. The varlable cost of each component is $1,700p,$ and the components are sold for $3,200$

$p$ each. The company sold $6,000$ components during the prlor year. $(p$ denotes the peso, Argentina's national currency.

Several countrles use the peso as thelr monetary unit. On the day this exercise was written, Argentina's peso was worth

US$$0\mathrm{.}104.$ In the following requirements, Ignore income taxes.$)$

Required:

Compute the break$-$even point in units.

Note: Round your answer to the nearest whole number.

What will the new break$-$even point be if fixed costs increase by $15$ percent?

Note: Round your answer to the nearest whole number.

What was the company's net income for the prlor year?

The sales manager belleves that a reduction in the sales price to $2,700p$ will result in orders for $900$ more components

each year. What will the break$-$even point be if the price is changed?

Note: Round your answer to the nearest whole number.

Should the price change discussed in requirement $4$ be made?

Answer is complete but not entirely correct.

Yes, since the projected net income will increase.