For a production volume between 20,001 and 45,000 units the fixed fee would increase to a total of $90,000 per

in the given problem

own production capacity 20000 units

sales price = $ 8 per unit

fixed price = $ 36000 to produce maximum 20000 units

variable cost = $ 4 per unit

if production outsourced

variable cost = $ 3

fixed cost = $ 45000 upto 20000 units, $ 90000 for 20001 to 45000 units

3. calculation of break-even point in unit sales assuming neptune plans to use all of its production capcity to produce the first 20000 units, and commits to hiring the outside supplier to produce up to 15000 additional units

break-even point = Fixed Cost/(sales price-variable cost)

break-even point for own production = 36000/(8-4)

=9000 units

break-even point for outside supplier production = 45000/(8-3)

= 9000 units

hence total breakeven point in units = 9000+9000

= 18000 units

4d. calculation of profit earned by neptune if it sells 35000 units per month and agrees to pay its marketing manager a bonus of 20 cents for each unit sold above the beak-even point from requirements.

bonus = (sales in units - breakeven point in units) X 20 cents

= (35000-18000)x20 cents

= 17000 units x 20 cents

bonus = 340000 cents ($3400)