Edición Visualización Historial Marcadores Ventana Ayuda newconnect.mheducation.

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Edición Visualización Historial Marcadores Ventana Ayuda newconnect.mheducation.com apter 5 6 Help Save & Exit 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 t produce and sell. The new toy will sell for $2.80 per unit. Enough capacity exists in the company's plant to produce 30,600 units of the expenses associated with the toy would total $46,318 per month. toy each month. Variable expenses to manufacture and sell one unit would be $1.78, and fixed The company's Marketing Department predicts that demand for the new toy will exceed produce. Additional manufacturing space can be rented from another expenses in the rented facility would total $196 per unit, due to somewhat less efficient the 30,600 units that the company is able to company at a fixed expense of $2,316 per month. Variable operations than in the main plant Required: t What is the monthly break-even point for the new toy in unit sales and dollar sales. (Round "per unit" to 2 decimal intermediate and final answers to the nearest whole number.) new toy in unit sales and dollar sales. (Round "per unit" to 2 decimal places intermediate and final answer to the nearest whole number) 3·lf the recei many units must be sold each month to attain a target profit of $10.836 per month? (Round "per unit" to 2 decimal sales manager receives a bonus of 20 cents for each unit sold in excess of the break-even month to attain a target profit that equals a 28% return on the monthly investment in fed point, how many units must be sold decimal places, intermediate and final answer to the nearest whole number) 1. Break-even point in unit saler Break-even point in dollar sales 2 Unit sales needed to attain target srofie 3 Unit sales needed to attain target profe Prev 2 of 91 Next > What is tha net nneratina incnme?

Explanation / Answer

Answer 1. Monthly BEP for New Toy, Upto 30,600 Units: Contribution Margin Per Toy = $2.80 - $1.78 = $1.02 per Toy Fixed Cost = $46,318 At 30,600 Units, Current Contribution Cover = $1.02 X 30,600 Units = $31,212 Uncovered Fixed costs = $46,318 - $31,212 = $15,106 Additional Fixed Cost = $2,316 Contribution at New Factory = $2.80 - $1.96 = $0.84 per Toy BEP for New Factory = Fixed Cost / Contribution per Unit BEP for New Factory = ($15,106 + $2,316) / $0.84 BEP for New Factory = 20,740.48 or say 20,741 Units (approx.) Monthly BEP = 30,600 Units + 20,741 Units Monthly BEP = 51,341 toys Answer 2. Target Profit = $10,836 per month BEP (target profit) = (Fixed Cost + Target Profit) / Contribution per Unit BEP for New Factory = ($15,106 + $2,316 + $10,836) / $0.84 BEP for New Factory = 33,640.48 or say $33,641 units (Approx.) Monthly BEP (Target Profit - $10,836) = 30,600 Units + 33,641 Units Monthly BEP (Target Profit - $10,836) = 64,241 Units Answer 3. Monthly Target Profit = ($46,318 + $2,316) X 28% Monthly Target Profit = 13,617.52 New Variable cost in new Factory = Current Variable Cost + Bonus Paid to Sales Manager New Variable cost in new Factory = $1.96 + $0.20 = $2.16 New Contribution = $2.80 - $2.16 = $0.64 per toy Units to be sold over 30,600 Toys to earn Profit of $13,617.52 = ($15,106 + $2,316 + $13,617.52) / $0.64 Units to be sold over 30,900 Toys to earn Profit of $13,787.01 = 48,499.25 units or say 48,500 units Monthly BEP = 30,600 Units + 48,500 Units Monthly BEP = 79,100 Units

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