Problem 5 25A Changes in Fixed and Variable Expenses Break Even and Target Profit Analysis LO5 4, LO5 5, LO5 6 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 $3 30 per unit Enough capacity exists in the companys plant to produce 30,100 units of the toy each month Variable expenses to manufacture and sell one unit would be $2 08, and fixed expenses associated with the toy would total $54,583 per month The company's Marketing Department predicts that demand for the new toy will exceed 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 $2,729 per month Variable expenses in the rented facility would total $2 31 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 ) 2 How many units must be sold each month to make a monthly profit of $12,672 (Round per unit to 2 decimal places, intermediate and final answer to the nearest whole number ) 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 24 on the monthly investment in fixed expenses (Round per unit to 2 decimal places, intermediate and final answer to the nearest whole number )

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Problem 5 25A Changes in Fixed and Variable Expenses  Break Even and Target Profit Analysis  LO5 4, LO5 5, LO5 6  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 $3 30 per unit  Enough capacity exists in the companys plant to produce 30,100 units of the toy each month  Variable expenses to manufacture and sell one unit would be $2 08, and fixed expenses associated with the toy would total $54,583 per month  The company's Marketing Department predicts that demand for the new toy will exceed 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 $2,729 per month  Variable expenses in the rented facility would total $2 31 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 ) 2  How many units must be sold each month to make a monthly profit of $12,672  (Round  per unit  to 2 decimal places, intermediate and final answer to the nearest whole number ) 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 24  on the monthly investment in fixed expenses  (Round  per unit  to 2 decimal places, intermediate and final answer to the nearest whole number )

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Problem 5-25A Changes in Fixed and Variable Expenses; Break-Even and Target Profit Analysis [LO5-4, LO5-5, LO5-6] Neptune Company produces toys and other items for use

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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.)

2.	How many units must be sold each month to make a monthly profit of $12,672? (Round "per unit" to 2 decimal places, intermediate and final answer to the nearest whole number.)

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 24% on the monthly investment in fixed expenses? (Round "per unit" to 2 decimal places, intermediate and final answer to the nearest whole number.)