Question
Rosario Company produces a single product in its Buenos Aires plant, which currently sells for 7.50pper unit. Fixed costs are expected to amount to 90,000pfor
Rosario Company produces a single product in its Buenos Aires plant, which currently sells for 7.50pper unit. Fixed costs are expected to amount to 90,000pfor the year, and all variable manufacturing and administrative costs are expected to be incurred at a rate of 4.50pper unit. Rosario has two salespeople who are paid strictly on a commission basis. Their commission is 10 percent of the sales dollars they generate. (Ignore income taxes.) (pdenotes the peso, Argentinas national currency. Many countries use the peso as their national currency. On the day this exercise was written, Argentinas peso was worth .1886 U.S. dollars.) |
1. Suppose management alters its current plans by spending an additional amount of 7,500pon advertising and increases the selling price to 9.00pper unit. Calculate the profit on 60,000 units. |
2. The Salente Company has just approached Rosario to make a special one-time purchase of 10,000 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 30,000p?(Round your answer to 2 decimal places.) |
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