Chapter 03 Post-Chapter Assignment 6 Dunn Barrels, Inc. (DBI) manufactures oak barrels for the wine industry at its facility in the United States. One of the raw materials used for some of its barrels is French oak lumber. The company fabricates the oak lumber into the appropriate-sized staves and assembles these staves, along with other components, into barrels. In July 2014, the company signed a contract to buy oak lumber from a French supplier for the coming two years. The contract calls for DBI to pay the supplier in euros (), although all other costs that DBI incurs are paid for in dollars. A summary of the production cost for one barrel, based on the expected production level, follows: points Variable sota French All other variable costs Ficate Based on the exchange rate at the time the contract with the French supplier was signed. The cost of lumber in euros was 77.50 as of July 2014 The exchange rate between the dollar and the euro was $136 - 100 in July 2014 when the contract was signed By July 2015, the exchange rate had changed to $110 - 6100 Required b. What effect, any would the change in the exchange rate have on Do's variable cost per unit for July 2014 versus July 2015? Increase Decrease No effect What effect, if any, would the change in the exchange rate have on Der's contribution margin per unit for July 2014 versus July 2015? Increase