Reference no: EM132804639

Corrientes Company produces a single product in its Buenos Aires plant that currently sells for 6.70p per unit. Fixed costs are expected to amount to 53,000p for the year, and all variable manufacturing and administrative costs are expected to be incurred at a rate of 2.20p per unit. Corrientes has two salespeople who are paid strictly on a commission basis. Their commission is 10 percent of the sales revenue 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 .104 U.S. dollar.)

Problem 1: Suppose management alters its current plans by spending an additional amount of 3,900p on advertising and increases the selling price to 7.70p per unit. Calculate the profit on 68,000 units. (Do not round intermediate calculations. Enter your answer in pesos.)