Swola Company Reports the Following Annual Cost Data for Its

question 146

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:

Freud's Theory

A set of psychoanalytic theories developed by Sigmund Freud, often focusing on unconscious desires and childhood experiences.

Unconscious Forces

Psychological factors that influence human behavior and decision-making without the individual's conscious awareness, a concept profound in psychoanalytic theory.

Libido

A term used to describe one's sexual drive or desire for sexual activity.