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Nancy Company produces items for use in at vacation theme parks. A new stuffed animal has come onto the market that the company is anxious
Nancy Company produces items for use in at vacation theme parks. A new stuffed animal has come onto the market that the company is anxious to produce and sell. The new stuffie will sell for $3.20 per unit. Enough capacity exists in the company's plant to produce 30,300 units of the stuffies each month. Variable expenses to manufacture and sell one unit would be $2.02, and fixed expenses associated with the stuffie would total $53,131 per month. The company's Marketing Department predicts that demand for the new stuffie will exceed the 30,300 units that the company is able to produce. Additional manufacturing space can be rented from another company at a fixed expense of $2,657 per month. Variable expenses in the rented facility would total $2.24 per unit, due to somewhat less efficient operations than in the main plant. Required: 1. What is the monthly break-even point for the new toy in unit sales and dollar sales. 2. How many units must be sold each month to attain a target profit of $11,712 per month? 3. If the sales manager receives a bonus of 15 cents for each unit sold in excess of the break-even point, how many units must be sold each month to attain a target profit that equals a 28% return on the monthly investment in fixed expenses? (For all requirements, Round "per unit" to 2 decimal places, intermediate and final answers to the nearest whole number.) Break-even point in unit sales Break-even point in dollar sales units 1. Unit sales needed to attain target profit units 2. Unit sales needed to attain target profit 3. units
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