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Neptune Company has developed a small inflatable toy it is anxious to introduce to its customers, The company's Marketing Department estimates demand for the new

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Neptune Company has developed a small inflatable toy it is anxious to introduce to its customers, The company's Marketing Department estimates demand for the new toy will range between 20,000 units and 40,000 units per month. The new toy will sell for $8.00 per unit. Enough capacity exists in the company's plant to produce 25,000 units of the toy each month. Variable expenses to manufacture and sell one unit would be $4.00, and incremental fixed expenses associated with the foy would total $36,000 per month. Neptune has aiso identified an outside supplier who could produce the toy for a price of $3.00 per unit plus a fixed fee of $65,000 per month for ary production volume up to 25,000 units. For a production volume between 25,001 and 55,000 units, the fixed fee would increase to a total of $130,000 per month Required: 1. Calculate the break-even point in unit soles assuming Noptune does not hire the outside supplier Note: Do not round your intermediate calculations. 2. How much profit wit Neptune earn assuming: a. it produces and sells 25,000 units? b. It does not produce any units and insteed outsources the production of 25,000 units to the outside supplier and then selis those units to its customers? 3. Calculate the break-even point in unit sales ossuming Neptune plans to use all of its production capacity to produce the first 25.000 that it sells and olso commits to hiring the outside supplier to produce up to 15,000 oddditional units. 4. Astume Neptune plans to use all of its production capacity to produce the fint 25,000 units it selts and also commits to hiring the outside supplier to produce up to 15,000 additional units. a. What total unit sales would Neptune need to ocheve to equal the proft earned in requirement 2 a? b. What total unit sales would Neptine need to achicve to attain a targot profit of $66,500 per month? c. How much profit will Neptune earn if it sells 40,000 units per month? d. How much profit wit Neptune earn if it sels 40,000 units per month and agrees to pay its marketing manager a bonus of 10 cents for each unit sold above the break-even point from requirement 3 ? 5 if Nepturne outsources all production to the outside supplier, how much profit wir the company earn if it selts 40,000 units

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