Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Neptune Company produces toys and other items for use in beach and resort areas. A small, inflatable toy has come onto the market that the

image text in transcribed

Neptune Company produces toys and other items for use in beach and resort areas. A small, inflatable toy has come onto the market that the company is anxious to produce and sell. The new toy will sell for $2.70 per unit. Enough capacity exists in the company's plant to produce 31,000 units of the toy each month. Variable expenses to manufacture and sell one unit would be $1.72, and fixed expenses associated with the toy would total $45,070 per month. The company's Marketing Department predicts that demand for the new toy will exceed the 31,000 units that the company is able to produce. Additional manufacturing space can be rented from another company at a fixed expense of $2,254 per month. Variable expenses in the rented facility would total $1.89 per unit, due to somewhat less efficient operations than in the main plant. Required 1. Compute the monthly break-even point for the new toy in unit sales and in dollar sales. (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 2. How many units must be sold each month to make a monthly profit of $10,530? (Round "per unit" to 2 decimal places, intermediate and final answer to the nearest whole number.) Total units to be sold 3. If the sales manager receives a bonus of 20 cents for each unit sold in excess of the break-even point, how many units must be sold each month to earn a return of 22% on the monthly investment in fixed expenses? (Round "per unit" to 2 decimal places, intermediate and final answer to the nearest whole number.) Total units to be sold ui

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Remote Auditing A Quick And Easy Guide For Management System Auditors

Authors: Denise Robitaille

1st Edition

1932828311, 978-1932828313

More Books

Students also viewed these Accounting questions

Question

e. What do you know about your ethnic background?

Answered: 1 week ago