Swola Company Reports the Following Annual Cost Data for Its

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.