John Smith, president of Furman Enterprises, remembers from his first accounting course that to calculate unit cost you divide total cost by the number of units produced. In reviewing a recent production report, he noticed that fixed overhead per unit was higher than he expected. He has ordered the production department to increase production in the coming months by 15% so that the overhead costs are spread over more units, which will lower the unit cost. He believes that this action will result in a higher gross margin per unit and increase the company's profitability.

He brings his idea to you, the production manager. Do you think his suggestion is a good one? Why or why not?