Rosario Company, which is located in Buenos Aires, Argentina, manufactures a component used in farm machinery. The firm's fixed
costs are per year. The variable cost of each component is and the components are sold for each. The
company sold components during the prior year. 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$ In the following requirements,
ignore income taxes.
Required:
Compute the breakeven point in units.
What will the new breakeven point be if fixed costs increase by percent?
What was the company's net income for the prior year?
The sales manager believes that a reduction in the sales price to will result in orders for more components each year.
What will the breakeven point be if the price is changed?
Should the price change discussed in requirement be made?
