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: Sales ... $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 ... $40,000; Unit Sales ... 1,000. Product 2: Sales ... $400,000; Var Mfg ... $160,000; Var G&A ... $60,000; CM ... $180,000; Fixed Mfg ... $32,000; Fixed G&A ... $48,000; 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 same manufacturing cost structure and no loss of regular sales. Variable General and Administrative costs for the special order are estimated to be $50 per wheel.

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:

Sales ... $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 ... $40,000;

Unit Sales ... 1,000.

Product 2:

Sales ... $400,000;

Var Mfg ... $160,000;

Var G&A ... $60,000;

CM ... $180,000;

Fixed Mfg ... $32,000;

Fixed G&A ... $48,000;

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 a total manufacturing capacity of 2,000 wheels per year. If the maximum external demand for either product separately is 1,500 units, what is the maximum profit Dubs can make in a year (assuming an optimal allocation of resources)?

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