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, how many units should Dubs produce of Product 2 in order to maximize profits?

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. What is the full manufacturing cost of a wheel in the Dubs division given the current level of production?

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