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The dubs division of fast company (the parent company) produces wheels for of road sport vehicles. Dubs has two products 1 and 2. two products
The dubs division of fast company (the parent company) produces wheels for of road sport vehicles. Dubs has two products 1 and 2. two products only differ in how they are marketed. product 1is sold in bulk to customizing shops while product 2 is sold directly to consumers. Dub's estimated operating data for the year follows
Products 1 - Product 2
revenues - $300,000 revenues - $ 400,000
Var mfg - $160,000 Var mfg - $160,000
Var G & A -$40,000 Var G&A -$60,000
CM - $100,000 CM -$180,000
Fixed Mfg - $24,000 Fixed Mfg -$ 32,000
Fixed G&A - $36,000 Fixed G&A - $48,000
Op.profit - $40,000 Op.profit - $100,000
Unit sales - $1000 Unit sales - $ 1000
question:
1. Unless otherwise stated assume the fixed cost given above are allocated cost and unavoidable. what would be the total contribution margin in the Dubs division if production were increased by 50%? assume there are no capacity contraints. round to the nearest $1.00
2. Assume the dubs division has a total manufacturing capacity of 2000 wheels per year. If the maximum external demand for either product separately is 1,500 units, what is the maximum operating profit dubs can make in a year?
3.What would be the full manufacturing cost of the wheel in the dubs division if production were increased by 50% assime there are no capacity constraints round your nearest into $0.01
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