Neptune Company produces toys and other items for use in beachand resort areas. A small, inflatable toy has come onto the marketthat the company is anxious to produce and sell. The new toy willsell for $3.10 per unit. Enough capacity exists in the company’splant to produce 30,500 units of the toy each month. Variableexpenses to manufacture and sell one unit would be $1.96, and fixedexpenses associated with the toy would total $51,655 per month.
The company's Marketing Department predicts that demand for thenew toy will exceed the 30,500 units that the company is able toproduce. Additional manufacturing space can be rented from anothercompany at a fixed expense of $2,583 per month. Variable expensesin the rented facility would total $2.17 per unit, due to somewhatless efficient operations than in the main plant.
Required:
1. What is the monthly break-even point for the new toy in unitsales and dollar sales.
2. How many units must be sold each month to attain a targetprofit of $12,090 per month?
3. If the sales manager receives a bonus of 15 cents for eachunit sold in excess of the break-even point, how many units must besold each month to attain a target profit that equals a 20% returnon the monthly investment in fixed expenses?
(For all requirments, Round "per unit" to 2 decimalplaces, intermediate and final answers to the nearest wholenumber.)
