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Problem 6.25 (Algo) Chonges in Fixed and Variable Costs; Break-Even and Torget Profit Analysis [LO6-4, LO6.5, LO6.6] Neptune Company has developed a small intlatable toy

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Problem 6.25 (Algo) Chonges in Fixed and Variable Costs; Break-Even and Torget Profit Analysis [LO6-4, LO6.5, LO6.6] Neptune Company has developed a small intlatable toy that it is anxious to introduce to its customers. The company's Marketing Department estimates that demand for the new toy will ronge between 15,000 units and 30,000 units permonth. The new toy will sel for $10,00 per unit. Enough capacity exists in the company's piant to produce 20,000 units of the toy cach month. variable expenses to manufacture and sell one unit would be $6.00, and incremental fixed expenses as5ociated with the toy would total $34,000 per month Neptune has also identified an outside supplier who could produce the toy for a pure of 55.00 per unit plus a fixed fee or $47.000 per month for any production volume up to 20,000 units. For a production volume between 20,001 and 45,000 unts the fixed fee would increase to a total of 594,000 permonth. Required: 1. Caiculate the break-even point in unit sales-assuming that Neptune does not hire the outside suppler. (Do not round your. intermediate colculetions.) 2. How much profit wall Neptune earn assuming a. It produceband sels 20,000 unite b. It does not produce any unis and instead outsources the production of 20,000 units to the outside suppller and then selis those units to its customists 3. Colculate the break-even point in unit saies assuming that Neptune plans to use all of its production capocity to produce the fust 20.000 sinis that it sells and that it also commits to huring the outsice supplier to produce up to 10,000 : additional unite

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