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Neptune Company has developed a small inflatable toy that it is anxious to introduce to its customers. The company's Marketing Department estimates that demand for
Neptune Company has developed a small inflatable toy that it is anxious to introduce to its customers. The company's Marketing Department estimates that demand for the new toy will range between units and units per month. The new toy will sell for $ per unit. Enough capacity exists in the company's plant to produce units of the toy each month. Variable expenses to manufacture and sell one unit would be $ and incremental fixed expenses associated with the toy would total $ per month.
Neptune has also identified an outside supplier who could produce the toy for a price of $ per unit plus a fixed fee of $ per month for any production volume up to units. For a production volume between and units the fixed fee would increase to a total of $ per month.
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