Neptune Company a small inflatable toy that it is anxious to introduce to its customers. The companys marketing department estimates that the demand for the new toy range between 10 000 units and 40 000 units per month. The new toy will sell for $9.00 per unit. Enough capacity exists in the companys plan to produce 15 000 units of toys each month. Variable expense to manufacture and sell one unit would be $5.00, and incremental fixed expense associated with the toy would total $32 000 per month.

Neptune has also identified an outside supplier who could produce the toy for a price of $4.00 per unit plus a fixed fee $29 000 per month for any production volume up to 15 000 units. For production volume between 15 001 and 35 000 units the fixed fee would increase to a total of $58 000 per month.

1. What total unit sales would Neptune need to achieve in order to equal the profit of 28000?

b. What total unit sales would Neptune need to achieve in order to attain a target profit of $30 500 per month?

3. How much profit will Neptune earn if it sales 40 000 units per month?
4. How much profit will Neptune earn if it sales 40 000 units per month and agrees to pay its marketing manager a bonus of 20 cents for each unit sold above the break-even point of 21000?
5. If Neptune outsources all production to the outside supplier, how much profit will the company earn if it sales 40 000 units?