mba642exercise 7-27 #3

mba642exercise 7-27 #3 - p per year The variable cost of...

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Exercise 7-27, #3 only Data: Rosario company, which is located in Buenos Aires, Argentina, manufactures a component used in monetary unit. One the day this exercise was written, Argentina's peso was worth .314 U.S. dollars. In the following requirements, ignore income taxes). Question: What was the company's net income for the prior year? Net income = revenue - costs Costs = fixed and variable Answer: farm machinery. The firm's fixed costs are 2,000,000
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Unformatted text preview: p per year. The variable cost of each component is 1,000 p , and the components are sold for 1,500 p each. The company sold 7,000 components during the prior year. ( p denotes peso, Argentina's national currency. Several countries use the peso as their Revenue = 7,000 x 1,500 = 10,500,000 Variable costs = 7,000 x 1,000 = 7,000,000 Fixed costs = 2,000,000 Net income = 10,500,000- 7,000,000- 2,000,000 = 1,500,000 p...
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