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Problem 5-25 Changes in Fixed and Variable Expenses: Break Even and Target Profit Analys Neptune Company produces toys and other items for use in beach
Problem 5-25 Changes in Fixed and Variable Expenses: Break Even and Target Profit Analys 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 produoe and sell. The new toy will sell for $3.00 per unit. Enough capacity exists in the company's plant to produce 30,100 units of the toy each month. Variable expenses to manufacture and sell one unit would be $1.90, and fixed expenses associated with the toy would total $49,105 per month. The companys Marketing Department predicts that demand for the new toy will exoeed the 30.100 units that the company is able to produce. Additional manufacturing space can be rented from another company at a fixed expense of $2,.458 per month. Variable expenses in the rented fadility would total $2.10 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 aach month to maie a monthly profit of 511.4307 (Round "per unit to 2 decimal places, intermediate and final answer to the nearest whole number) Total units to be sold units 2 If the sales manager sceives a bonus or 20 cants fer each unit sola In exoass of the brea-even poir 'atur. ot 201e en the meninly ?sretnyt i.a a on monin to earn expenses IRound "per unit to 2 decimat places, internediate and fioal answer to the nearest whole number) sold now many units must nits Total units to be solcd
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