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Exercise 15-32 Pricing, Advertising, and Special-Order Decisions (LO 15-10) Skip to question [The following information...

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Accounting

Exercise 15-32 Pricing, Advertising, and Special-Order Decisions (LO 15-10) Skip to question [The following information applies to the questions displayed below.] Corrientes Company produces a single product in its Buenos Aires plant that currently sells for 6.80 p per unit. Fixed costs are expected to amount to 54,000 p for the year, and all variable manufacturing and administrative costs are expected to be incurred at a rate of 2.80 p 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, Argentinas national currency. Many countries use the peso as their national currency. On the day this exercise was written, Argentinas peso was worth $0.104 U.S. dollar.) Exercise 15-32 Part 1

Required: 1. Suppose management alters its current plans by spending an additional amount of 3,700 p on advertising and increases the selling price to 7.80 p per unit. Calculate the profit on 67,000 units. (Do not round intermediate calculations. Enter your answer in pesos.)

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