Final answer:
Swift Skateboards should either increase the sale price of the assembled skateboards by at least $3 or decrease the fixed costs of assembling by at least $7 to make assembled boards more profitable than unassembled boards.
Step-by-step explanation:
To determine whether Swift Skateboards should sell unassembled or assembled boards, we need to calculate the profits for both scenarios. Let's start with the unassembled boards: The selling price is $65, variable costs are $10, and fixed costs are $18, meaning the profit per board is $65 - $10 = $55 per board before subtracting fixed costs.
For assembled boards: Selling these at $72 with additional variable costs of $3 for assembly and fixed costs of $7 raises the total variable costs to $13 per board. The profit per assembled board before fixed costs would be $72 - $13 = $59.
Since the unassembled board profit is $55 and the assembled is $59 before considering fixed costs, the assembled boards have a higher base profit. However, unassembled boards have lower fixed costs ($18) compared to the fixed costs of selling assembled ($7 + $18 =$25). To compare profitability, we must ensure the final profits after subtracting fixed costs are higher for the assembled boards.
To make the assembled boards more profitable, Swift must increase the sale price of the assembled boards by at least $3 (to offset the higher fixed costs) or decrease the fixed costs of assembling the boards by at least $7 (to make the profit margin equal to that of unassembled boards). Therefore, the correct answer to this problem is A: increase the sale price of the assembled boards by at least $3 or decrease the fixed costs of assembling the boards by at least $7.