LIITUULIUI ILII LIUIUIUIIIISUIVIULUI. The Fair Play Division of Fast Company (the parent company) produces wheels for off- road sport vehicles. One-half of Fair Play's output is sold to the Glow Division of Fast; the remainder is sold to outside customers. Fair Play's estimated operating profit for the year is: Sales Internal Sales $ 300,000 200,000 60,000 Variable costs External Sales $ 400,000 200,000 60,000 $ 140,000 20,000 Fixed costs Operating profits Unit sales 40,000 20,000 Unless otherwise stated assume the fixed costs given above are unavoidable. Glow Division has an opportunity to purchase 20,000 wheels of the same quality from an outside supplier on a continuing basis for $12.50 per wheel. Required: Q1. What is the full cost of a wheel given the current level of production? Q2. What is the gross margin per unit on wheels sold internally to the Glow Division? Q3. What is the gross margin per unit on wheels sold externally into the market? Q4. If the maximum demand for the Fair Play Division's wheels in the external market is 20,000 units, what would be the Fair Play Division's total operating profits if the Fast Company allows Glow Division to purchase the wheels from the outside supplier