Swola Company reports the following annual cost data for its single product.Normal production level 75,000unitsDirect materials$1.25per unitDirect labor$2.50per unitVariable overhead$3.75per unitFixed overhead$300,000in totalThis 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 variable costing?
A. $187,500 decrease.
B. $112,500 increase.
C. $187,500 increase.
D. $112,500 decrease.
E. There will be no change in income.
Answer: E
You might also like to view...
Describe how currency fluctuations can present considerable risk to international business.
What will be an ideal response?
The process of communication begins when ________
A) a message is put into words B) the message is sent over a communication channel to the receiver C) the sender has an idea D) the receiver actually receives the message and decodes it
Advertising that contains an endorsement by a celebrity will not be deemed deceptive
Indicate whether the statement is true or false
________ is a series of prescribed steps to be taken by a small business owner to ensure that a profit will be made.
A. Budgeting B. Profit sharing C. Profit planning D. Forecasting