Rosario Company, Which Is Located In Buenos Aires, Argentina, Manufactures A Component Used In Farm Machinery. The Firm’s Fixed Costs Are 3,700,000 P Per Year
Rosario Company, which is located in Buenos Aires, Argentina, manufactures a component used in farm machinery. The firm’s fixed costs are 3,700,000 p per year. The variable cost of each component is 1,300 p, and the components are sold for 3,900 p each. The company sold 5,700 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 .327 U.S. dollar. In the following independent requirements, ignore income taxes.) 
Required:  
1  Compute the breakeven point in units. (Round your answer to the nearest whole number.) 
Breakeven point  ??? components 
2  What will the new breakeven point be if fixed costs increase by 5 percent? (Round your answer to the nearest whole number.) 
New breakeven point  ??? components 
3  What was the company’s net income for the prior year? 
Net income  ??? p 
4  The sales manager believes that a reduction in the sales price to 3,400 p will result in orders for 1,700 more components each year. What will the breakeven point be if the price is changed? (Round your answer to the nearest whole number.) 
New breakeven point  ??? components 
The Houston Armadillos, a minorleague baseball team, play their weekly games in a small stadium just outside Houston. The stadium holds 8,280 people and tickets sell for $12 each. The franchise owner estimates that the team’s annual fixed expenses are $165,600, and the variable expense per ticket sold is $4. (In the following requirements, ignore income taxes.) 
Required:  
5  If the stadium is half full for each game, how many games must the team play to break even? 
Team must play  ??? games 
The Houston Armadillos, a minorleague baseball team, play their weekly games in a small stadium just outside Houston. The stadium holds 13,000 people and tickets sell for $14 each. The franchise owner estimates that the team’s annual fixed expenses are $170,000, and the variable expense per ticket sold is $2. (In the following requirements, ignore income taxes.) 
Required: 

6  What is the safety margin for the baseball franchise if the team plays a 14game season and the team owner expects the stadium to be 30 percent full for each game? (Round your answer to the nearest dollar amount) 
Safety margin  $??? 
7  If the stadium is half full for each game, what ticket price would the team have to charge in order to break even? (Round your answer to the nearest dollar amount) 
Price  $??? per ticket 
8 Fill in the missing data for each of the following independent cases. (Ignore income taxes.) (Leave no ??? cells blank – be certain to enter “0” wherever required. Do not round your intermediate calculations) 
Sales
Revenue 
Variable
Expenses 
Total Contribution
Margin 
Fixed
Expenses 
Net
Income 
BreakEven
Sales Revenue 

1.  $  ???  $  40,000  $  ???  $  30,000  $  ???  $  40,000  
2.  80,000  ???  15,000  ???  ???  80,000  
3.  ???  40,000  80,000  ???  50,000  ???  
4.  110,000  22,000  ???  ???  38,000  ???  
College Pizza delivers pizzas to the dormitories and apartments near a major state university. The company’s annual fixed expenses are $40,000. The sales price of a pizza is $10, and it costs the company $5 to make and deliver each pizza. (In the following requirements, ignore income taxes.) 
Required:  
9  Using the contributionmargin approach, compute the company’s breakeven point in units (pizzas). 
Breakeven point  ??? pizzas 
10  What is the contributionmargin ratio? (Round your answer to 1 decimal place.) 
Contributionmargin ratio  ??? 
11  Compute the breakeven sales revenue. Use the contributionmargin ratio in your calculation. 
Breakeven point  $??? 
12  How many pizzas must the company sell to earn a target net profit of $65,000? Use the equation method. 
Number of pizzas  ??? 
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