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hello, may you please help me understand this concept? Rosario Company, which is located in Buenos Aires, Argentina, manufactures a component used in farm machinery.
hello, may you please help me understand this concept?
Rosario Company, which is located in Buenos Aires, Argentina, manufactures a component used in farm machinery. The firm's fixed costs are 3,800,000 p per yeat. The variable cost of each component is 1,200 p, and the components are sold for 3,600p each. The company sold 5,200 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 exereise was written. Argentina's peso was worth US\$0.104. In the following requirements, ignore income taxes.) Required: 1. Compute the break-even point in units. Note: Round your answer to the nearest whole number. 2. What will the new break-even point be if fixed costs increase by 5 percent? Note: Round your answer to the nearest whole number. 3. What was the company's net income for the prior year? 4. The sales manager believes that a reduction in the sales price to 3,100 will result in orders for 900 more components each year. What wil the break-even point be if the price is changed? Note: Round your answer to the nearest whole number. 5. Should the price change discussed in requirement 4 be made? What will the break-even point be if the price is changed? Note: Round your answer to the nearest whole number. 5. Should the price change discussed in requirement 4 be made Step by Step Solution
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