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The Dubs Division of East Company (the parent company) produces wheels for off-road sport vehicles. Dubs has two products, 1 and 2. The two products
The Dubs Division of East 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 ......... Product 2 Sales Price S300 each ........ $ 400 each Var Mfg $50 each ... $50 each Var GGA $34 each $160 each Fixed Mfg $53,000 .... .. $53,000 Fixed GGA $50,000 $84,000 Unless otherwise stated assume the fixed costs given above are allocated costs and unavoidable. Assume the Dubs division has a total manufacturing capacity of 3,000 wheels per year. If the maximum external demand for either product separately is 1,800 units, how many units should Dubs produce of Product 1 in order to maximize profits
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