Problem 6-25 (Algo) Changes in Fixed and Variable Costs: Break-Even and Target Profit Analysis (L06-4. LO6-5, L06-6) 3 3.75 Neptune Company has developed a small Intiatable 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 20.000 units and 30,000 units per month The new toy will sell for $9.00 per unit. Enough capacity exists in the company's plant to produce 25,000 units of the toy each month. Variable expenses to manufacture and sell one unit would be $5.00 and incremental fixed expenses associated with the toy would total $32.000 per month Neptune has also identified an outside supplier who could produce the toy for a price of $4.00 per unit plus a fixed fee of $69.000 per month for any production volume up to 25,000 units. For a production volume between 25.001 and 55.000 units the fowed fee would increase to a total of $138.000 per month Required: 1 Calculate the break even point in unit sales assuming that Neptune does not hire the outside supplier 2. How much profit will Neptune earn assuming It produces and sets 25.000 units b. It does not produce any units and instead outsources the production of 25.000 units to the outside supplier and then sell those units to its customers, 3. Calculate the break even point in unit sales assuming that Neptune plans to use all of its production capacity to produce the first 25000 units that it sells and that it also commits to hiring the outside supplier to produce up to 5.000 additional units 4. Assume that Neptune plans to use all of its production city to produce the first 25.000 units that it sells and that take commits to bring the outside supplier to produce up to 5.000 additional units What total unit sales would Neptune need to achieve in order to equal the profit came in regulament 202 What totalurit sales would Neptune need to achieve in order to attain a large profit of $70.500 per month How much prost will Neptune earn it itsells 20.000 units per month? d. How much profit will Neptune camiseks 30000 per month and agrees to pay its marketing manager a bonus of tocents for each unit sold above the break even point from requirementar 5. If Neptune outsources all production to the outside supplier, how much profit will the company earn if it sells 30,000 units? units 1 Break even point in unit sales - without hing 2a Profit if produces and sells 2b. Profit if outsources production and sells 3 Break-even point in unt sales -hining La Total unit sales 40 Total unit sales to achieve a target Profit of S70,500 4c Net operating income 4d Net operating income-bonus to marketing manager 5 Net operating income fully outsourced units units units