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Exercise 15-33 Pricing, Advertising, and Special-Order Decisions (LO 15-10) [The following information applies to the questions displayed below.) Rosario Company produces a single product in
Exercise 15-33 Pricing, Advertising, and Special-Order Decisions (LO 15-10) [The following information applies to the questions displayed below.) Rosario Company produces a single product in its Buenos Aires plant, which currently sells for 6.80 p per unit. Fixed costs are expected to amount to 56,000 p for the year, and all variable manufacturing and administrative costs are expected to be incurred at a rate of 2.50 p per unit. Rosario has two salespeople who are paid strictly on a commission basis. Their commission is 9 percent of the sales dollars they generate. (Ignore income taxes.) (p denotes the peso, Argentina's national currency. Many countries use the peso as their national currency. On the day this exercise was written, Argentina's peso was worth 1886 U.S. dollars.) Exercise 15-33 Part 1 Required: 1. Suppose management alters its current plans by spending an additional amount of 4.600 pon advertising and increases the selling price to 7.80 p per unit. Calculate the profit on 60,000 units. (Do not round intermediate calculations.) Profit 2. The Salente Company has just approached Rosario to make a special one-time purchase of 20,000 units. These units would not be sold by the sales personnel, and, therefore, no commission would have to be paid. What is the price Rosario would have to charge per unit on this special order to earn additional profit of 36,000 p? (Round your answer to 2 decimal places.) Sales price required P per unit
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