Designer dollhouses manufactures dollhouse kits that are meant to be assembled by customers. each kit sells for $60 and has $12 in fixed production costs and $10 in variable production costs. rather tha selling these kits, the firm is thinking about selling the dollhouses fully assembled for $95 each. the variable costs for assembling one dollhouse are expected to be $14. given these figures, which of the following statements is accurate? a designer should sell dollhouse kits rather than assembled dollhouses because its net income per unit would be $8 higher. b designer should sell assembled dollhouses rather than dollhouse kits because its net income per unit would be $21 higher. designer should sell assembled dollhouses rather than dollhouse kits because its net income per unit would be $43 higher. designer should sell dollhouse kits rather than assembled dollhouses because its net income per unit would be $14 higher.

The correct answer is B.

Explanation:

Giving the following information:

Designer Dollhouses manufactures dollhouse kits that are meant to be assembled by customers. Each kit sells for $60 and has $12 in fixed production costs and $10 in variable production costs. Rather tha selling these kits, the firm is thinking about selling the dollhouses fully assembled for $95 each. The variable costs for assembling one dollhouse are expected to be $14.

Contribution margin Kits:

CM= selling price - unitary variable costs

CM= 60 - 12= 48

CM assembled:

CM= 95 - 12 - 14= 69

Effect in Net income= 69 - 48= 21

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