Answer:
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