Swisher, Incorporated Reports the Following Annual Cost Data for Its

question 149

Multiple Choice

Swisher, Incorporated reports the following annual cost data for its single product: This product is normally sold for $48 per unit. If Swisher increases its production to 50,000 units, while sales remain at the current 30,000 unit level, by how much would the company's income increase or decrease under absorption costing?

• A) $60,000 decrease.
• B) $90,000 decrease.
• C) There is no change in income.
• D) $90,000 increase.
• E) $60,000 increase.

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Definitions:

Maturity Value

The amount to be received at the maturity of a financial instrument, typically including both the principal and interest.

Calculating Interest

The process of determining the interest payment on a loan or investment, based on the principal amount, rate, and time.

Dishonored Note

A promissory note that has not been paid by the maker at its maturity date, resulting in a default.

Journalize Entry

The act of recording a transaction in the accounting journal as part of the bookkeeping process.