Swola Company Reports the Following Annual Cost Data for Its

question 72

Multiple Choice

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.

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Definitions:

Beta Waves

A pattern of brain waves that are associated with active, alert thought and a focused state of mind.

Delta Waves

Slow and high amplitude brainwaves that are typically associated with deep sleep and aid in the body's healing process and rejuvenation.

Alpha Waves

A type of brainwave that is associated with relaxed, calm, and wakeful states, typically with closed eyes.

Theta Waves

A type of brainwave primarily observed in sleep and meditation, associated with relaxation, creativity, and reduced consciousness.