Exercise $7-25$ Manufacturing; Using CVP Analysis $($LO $7-1,$

$7-4)$Rosario Company, which is located in Buenos Aires, Argentina,

manufactures a component used in farm machinery. The firm$$s fixed

costs are $3,100,000$p$$per year. The variable

cost of each component is $1,200$p$,$ and the components

are sold for $3,200$p$$each$.$ The company sold

$5,300$ 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 exercise was written,

Argentina$$s peso was worth $0\mathrm{.}104$ U$.$S$.$ dollar. In the following

requirements, ignore income taxes.$)$

Required:

$1.$Compute the break$-$even point in

units.$($Round your answer to the nearest whole

number.$)$

$2.$What will the new break$-$even point be if

fixed costs increase by $15$ percent?$($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 $2,700$p$$will

result in orders for $1,000$ more components each year. What will the

break$-$even point be if the price is changed?$($Round

your answer to the nearest whole number.$)$

$5.$Should the price change discussed in

requirement $4$ be made