Q 8.66: Reno Rehab Co. specializes in building prefabricated decks that just snap together to form a sturdy, long- lasting structure. A deck that is 3.5 square metres sells for $8,000. Additional information includes: Direct materials Direct labour Variable manufacturng costs Fixed manufacturing costs Per Unit $ 1,325 2,175 695 915 $ 5,110 During their first year of operations Reno produced and sold 100 decks reporting a gross profit percentage a little above 35%. Costs remained constant over the next year, so the operations manager was surprised and pleased to find per unit cost had decreased to $4,805 and the gross profit percentage had risen to almost 40%. What might have happened that would cause this change in profitability? A Some fixed manufacturing costs must have been deferred in the second year. B Production levels were increased during the second year of operations. Production levels were decreased during the second year of operations. Sales volumes were higher in Year 2 than in Year 1