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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
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 ......... Product 2 Revenues $300,000 ......... $400,000 Var Mfg $70,000 $70,000 Var G&A $40,000 $60,000 Fixed Mfg $24,000 ... S32,000 Fixed G&A $45,000 ... $45,000 Unit Sales 1100 ... 1100 Unless otherwise stated assume the fixed costs given above are allocated costs and unavoidable. What would be the full manufacturing cost of a wheel in the Dubs division if total production were increased by 50% over the stated amount? Assume there are no capacity constraints. Round to the nearest S0.01
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