Question Completion Status: 5 7 8 9 10 11 12 139 140 150 A Moving to another question will save this response. Question 12 of 15 Question 12 10 points Save Answer The Dubs Division of Fast Company (the parent company) produces wheels for off-road sport vehicles. Dubs has two products, 1 and 2. The two products only differ in how they are marketed. Product 1 is sold in bulk to customizing shops, while Product 2 is sold directly to consumers, Dub's estimated operating data for the year follows. Product 1: Revenues... $300,000; Var Mfg... $160,000, Var G&A... $40,000; CM ... $100,000; Fixed Mfg... $24,000; Fixed G&A... $36,000; Op. Profits ... 540,000: Unit Sales ... 1,000. Product 2: Revenues... $400,000; Var Mfg ... $160,000; Var G&A... $60,000; CM ... $180,000; Fixed Mfg --- $32,000: Fixed G&A... 548,000; Op. Profits .. $100,000; Unit Sales ... 1,000. Unless otherwise stated assume the fixed costs given above are allocated costs and unavoidable. Assume the Dubs division has excess production capacity and can only sell 1,000 units of P1 and 1,000 units of P2. How much would profits increase if it accepted a special order to sell 500 units to a discount automotive parts supplier for $250 each? Assume the Dubs division currently has excess production capacity and can only sell 1,000 units of P1 and 1,000 units of P2. How much would profits increase if it accepted a special order to sell 500 units to a discount automotive parts supplier for $250 each? The special order could be filled at the same variable manufacturing cost per unit as current production. Dubs believes the special order would not reduce the volume of regular sales of P1, but would reduce the volume of regular sales of P2 by 100 units. Dubs would not incur its normal Variable General and Administrative costs on the special order but rather they estimate these costs to be 550 per wheel. 4 Moving to another question will save this response Question 12 of 15 A Moving to another question will save this response. Question Question 14 10 peints Swed The Dubs Division of Fast Company the parent company produces wheels for off-road sport vehicles. Dubs has two products, 1 and 2. The two products only differ in how they are marketed. Product 1 is sold in bulk to customizing shops, while Product 2 is sold directly to consumers. Dub's estimated operating data for the year follows. Product 1: Revenues... $300,000, Var Mfg ... $160,000; Var G&A.. $40,000: CM..$100,000; Fixed Mfg. $24,000; Fixed GLA..$36,000; Op. Profits $40,000: Unit Sales ... 1,000. Product 2: Revenues ... 5400,000; Var Mfg...5160,000, Var GRA... $60,000; CM .. $180,000; Fixed Mfg ... $32,000 Fixed G&A... $48.000; Op. Profits.... 5100,000 Unit Sales ... 1,000. Unless otherwise stated assume the fixed costs given above are allocated costs and unavoidable. Assume the Dubs division has a total manufacturing capacity of 2,000 wheels per year of the maximum external demand for either product separately is 1,500 units, how many units should Dubs produce of Product 1 in order to maximize profits? 180,000 A Moving to another question will save this response. Question 14 of 15
