Swola Company reports the following annual cost data for its single product. This product is normally sold for $25 per unit.If Swola increases its production to 200,000 units,while sales remain at the current 75,000 unit level,by how much would the company's income increase or decrease under absorption costing?
A)$187,500 increase.
B)$112,500 increase.
C)There will be no change in income.
D)$112,500 decrease.
E)$187,500 decrease.

Question

Swola Company reports the following annual cost data for its single product.  This product is normally sold for $25 per unit.If Swola increases its production to 200,000 units,while sales remain at the current 75,000 unit level,by how much would the company's income increase or decrease under absorption costing?
A)$187,500 increase. 
B)$112,500 increase. 
C)There will be no change in income. 
D)$112,500 decrease. 
E)$187,500 decrease.

Quizplus · Accepted Answer

The Answer of Swola Company reports the following annual cost data for its single product.  This product is normally sold for $25 per unit.If Swola increases its production to 200,000 units,while sales remain at the current 75,000 unit level,by how much would the company's income increase or decrease under absorption costing?
A)$187,500 increase. 
B)$112,500 increase. 
C)There will be no change in income. 
D)$112,500 decrease. 
E)$187,500 decrease.

Swola Company Reports the Following Annual Cost Data for Its