Eiverview Lumber Company incurs variable costs of $25.00 per unit in producing its standard deck...
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Eiverview Lumber Company incurs variable costs of $25.00 per unit in producing its standard deck chair, which it sells for $60.00 per unit. Alternatively, Riverview an produce and sell deluxe model deck chairs at a price of $74.00 per unit. Deluxe model variable costs are $36.00 per unit. If Riverview decides to produce deluce nodel deck chairs, the company will have to lease additional equipment at a cost of $25.000 per month, Piverview's existing fwed costs are $138,000 per month. Riverview's standard model deck chair soles are 6,000 units per month. Management estimates that sales volume of delume model deck chairs would be 6,000 units per month. Riverview should: (pick best answer) continue to produce standard deck thalis because income is decreased by $7000 if it produces deluxe medel deck chais. produce either standard or delowe model deck chairs becauve its income is the same regardes witch to deluse model deck chairs because income is increaved by 518000 . witch to deluae model deck chairs because the change would kwer the companys breakeven point. switch to deluxe model deck chairs becsuse contribution murgin is increased by $1B,000
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