The level of inventory of a manufactured product has increased by 7,000 units during a period. The following data are also available:
| Variable | Fixed | |
| Unit manufacturing costs of the period | $12.00 | $6.00 |
| Unit operating expenses of the period | 4.00 | 1.50 |
What would be the effect on income from operations if absorption costing is used rather than variable costing? Answer
| a. | $52,500 increase | |
| b. | $42,000 increase | |
| c. | $52,500 decrease | |
| d. | $42,000 decrease |
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