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Neptune Company has developed a small inflatable toy that it is aruxious to introduce to its customers. The company's Marketing Department esfimates that demand for

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Neptune Company has developed a small inflatable toy that it is aruxious to introduce to its customers. The company's Marketing Department esfimates that demand for the new toy will range between 17,000 units and 37.000 units per month. The new toy wilf sell for $3.00 per unit. Enough capacity exists in the company's plant to produce 20.000 units of the toy each month. Varlable expenses to manufacture and sell one unit would be $1.00, and incremental foxed expenses assoclated with the toy would total $27,000 per morith Neptune has aiso identified an outside supplier who could produce the toy for a price of $175 per unit plus a fixed fee of $20,000 per month for any production volume up to 22.000 units, For a production volume between 22.001 and 42.000 units the fixed fee would increase to a total of $40,000 per month. Required: 1. Catculate the break-even point in unit sales assuming that Neptune does not hire the outside suppliet. 2. How moch profit will Neptune earn assuming: a. It produces and sells 20.000 units b. It does not produce any units and instead outsources the production of 20.000 units to the outside suppiler and then selis those units to its customers. 3. Calculate the break-even point in unit sales assuming that Neptune plans to use alt of its production capacity to produce the first 20.000 units that it sells and that it also commits to hiring the outside supplier to produce up to 17.000 additional units. 4. Assume that Neptune plans to use all of its production copacity to produce the first 20.000 units that it sells and that it also commits to hiting the outside supplier to produce up to 17,000 additional tinits a. What total unit sales would Neptune need to achieve in order to equal the profit camed in requirement 2a ? b. What total unit sales would Neptune need to achieve in order to attain a target profit of $15.500 per monthe? c. How much proft will Neptune eam if it sells 37,000 units per month? 6. How much profit will Neptune eatn if it selis 37,000 units per month and agrees to pay its marketing manager a bonus of to cents for each init sold above the break-even point from requirement ?? Answer is complete but not entirely correct

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