Solution 1: | |
Unit selling price | 10.00 |
Less: Unit variable cost | 6.00 |
Contribution margin per unit | 4.00 |
Fixed expenses | 32000 |
Divided by: Contribution margin per unit | 4.00 |
Break-even point in unit sales | 8000 |
Solution 2a: | |
Units produced and sold | 25000 |
Contribution margin (units*Contribution margin per unit) | 100000 |
Less: Fixed expenses | 32000 |
Net profit | 68000 |
Solution 2b: | |
Units purchased from outside supplier | 25000 |
*Purchase price | 5 |
Variable Purchase cost from outside supplier | 125000 |
Sales revenue (units* sales price) | 250000 |
Less: Variable Purchase cost | 125000 |
Less: Fixed Fee | 69000 |
Net profit | 56000 |
Solution 3: | |
Total Fixed expenses (own + Fixed fee) | 101000 |
Less: contribution from own production | 100000 |
Contribution required from outside suppliers | 1000 |
/ Contribution margin per unit from outside supplier ($10 -$5) | 5.00 |
Units required to buy from outside supplier | 200 |
Add: Units from own production | 25000 |
Break-even point in unit sales | 25200 |
Solution 4a: | |
Desired profit (as per requirement 2a) | 68000 |
Add: Total Fixed expenses (own + fixed fee) | 101000 |
Total contribution required | 169000 |
Less: contribution from own production | 100000 |
Contribution required from outside suppliers | 69000 |
/ Contribution margin per unit from outside supplier ($10 -$5) | 5.00 |
Units required to buy from outside supplier | 13800 |
Add: Units from own production | 25000 |
Unit sales required | 38800 |
Solution 4b: | |
Desired profit | 70500 |
Add: Fixed expenses | 101000 |
Total contribution required | 171500 |
Less: contribution from own production | 100000 |
Contribution required from outside suppliers | 71500 |
/ Contribution margin per unit from outside supplier ($10 -$5) | 5.00 |
Units required to buy from outside supplier | 14300 |
Add: Units from own production | 25000 |
Unit sales required | 39300 |
Solution 4c: | |
Contribution from own production | 100000 |
Contribution margin from outside suppliers (5000*5) | 25000 |
Total contribution | 125000 |
Less: fixed costs | 101000 |
profit will Neptune earn if it sells 30,000 units per month | 24000 |
Solution 4d: | |
profit will Neptune earn if it sells 30,000 units per month | 24000 |
Less: commission paid to marketing manager [(30000-25200)*0.20] | 960 |
Net profit after commission paid | 23040 |
Solution 5: | |
Sales units | 30000 |
/ Contribution margin per unit from outside supplier ($10 -$5) | 5.00 |
Contribution margin | 150000 |
Less: Fixed expenses | 138000 |
Net profit | 12000 |
Saved Help Neptune Company has developed a small inflatable toy that it is anxious to introduce...
Neptune Company has developed a small inflatable 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 $8.00 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 $4.00, and incremental fixed expenses associated with...
Neptune Company has developed a small inflatable 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 15,000 units and 30,000 units per month. The new toy will sell for $8.00 per unit. Enough capacity exists in the company's plant to produce 20,000 units of the toy each month. Variable expenses to manufacture and sell one unit would be $4.00, and incremental fixed expenses associated with...
Neptune Company has developed a small inflatable 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 15,000 units and 30,000 units per month. The new toy will sell for $8.00 per unit. Enough capacity exists in the company's plant to produce 20,000 units of the toy each month. Variable expenses to manufacture and sell one unit would be $4.00, and incremental fixed expenses associated with...
Neptune Company has developed a small inflatable 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 15,000 units and 35,000 units per month. The new toy will sell for $8.00 per unit. Enough capacity exists in the company's plant to produce 20,000 units of the toy each month. Variable expenses to manufacture and sell one unit would be $4.00, and incremental fixed expenses associated with...
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Neptune Company has developed a small inflatable 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 15,000 units and 35,000 units per month. The new toy will sell for $10.00 per unit. Enough capacity exists in the company’s plant to produce 20,000 units of the toy each month. Variable expenses to manufacture and sell one unit would be $6.00 , and incremental fixed expenses associated...
Neptune Company has developed a small inflatable 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 10,000 units and 35,000 units per month. The new toy will sell for $9.00 per unit. Enough capacity exists in the company’s plant to produce 15,000 units of the toy each month. Variable expenses to manufacture and sell one unit would be $5.00, and incremental fixed expenses associated with...
Neptune Company has developed a small inflatable 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 15,000 units and 35,000 units per month. The new toy will sell for $8.00 per unit. Enough capacity exists in the company's plant to produce 20,000 units of the toy each month. Variable expenses to manufacture and sell one unit would be $4.00, and incremental fixed expenses associated with...
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