Calculate break-even point in units

Reference no: EM1358155

Rosario Company, which is located in Buenos Aires, Argentina, and manufactures a component used in farm machinery. The firm's fixed costs are 4,000,000 p per year. The variable cost of each component is 2,000 p, and the compoents are sold for 3,000 p each. The company sold 5,000 components during the prior years. (p denotes the peso, Argentina's national currency. Several countries use the peso as their monetary unit. On the day this exercise was written, Agentina's peso was worth .327 U.S. dollar. In the following requirements, ignore income taxes.)

1. Compute the break-even point in units.
2. What will the new break-even point be if fixed costs increase by 10 percent?
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 2,500 p will result in order for 1,200 more compoents each year. What will the break-even point be if the price is changed?
5. Should the price change discussed in requirement (4) be made?

Reference no: EM1358155

Questions Cloud

Use three-sphere model for systems management : Use the three-sphere model for systems management and brainstorm issues related to the change based on the business, technology, and organization spheres.

Transportation services in logistics : What modes may be involved in the movement of the finished appliances to your distribution centers and international customers and what volumes do you believe will be required for you to obtain the best possible transportation pricing?

Causes of the disorder : what are the causes of the disorder? what is the disorder's etiology?

Illustrate what are the qualifications and limitations : Explain the multiplier concept as it applies in this case. Illustrate what are the qualifications and limitations of the Multiplier Model.

Calculate break-even point in units : Rosario corporation, which is located in Buenos Aires, Argentina, and manufactures a component used in farm machinery. The company's fixed costs are 4,000,000 each year.

Managing product-harm crisis : Define a product-harm crisis. Identify the factors that contribute to a product-harm crisis. Compare and contrast the findings of the various studies on product-harm crisis.

Productivity and quality : Evaluate how the same focus on quality demonstrated by the Barcelona Restaurant Group could benefit manufacturing operations. Provide specific examples to support your response.

How protocol ensures serializability and deadlock freedom : To lock any other vertex, the transaction must have visited all the parents of that vertex and must be having a lock on one of the parents of the vertex. Show that the protocol ensures serializability and deadlock freedom.

Elucidate impact the price elasticity of the product : Elucidate how the necessity of a good and the availability of substitutes impact the price elasticity of the product. The product is beef.

User Account

All Pages