Swola Company reports the following annual cost data for its Single product.

Normal Product Level: 75,000 Units
Direct Materials: $1.25 per units
Direct Labour $2.50 per units
Variable Overhead $3.75 per units
Fixed Overhead $300,000 in total

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 gross margin increase or decrease under absorption costing?

a. $112,500 decrease.
b. $187,500 increase.
c. There will be no change in gross margin.
d. $112,500 increase.
e. $187,500 decrease.

The law firm of furlan and benson accumulates costs associated with individual cases, using a job order cost system. the following transactions occurred during july: jul. 3 charged 175 hours of professional (lawyer) time to the obsidian co. breech of contract suit to prepare for the trial, at a rate of $150 per hour. 10 reimbursed travel costs to employees for depositions related to the obsidian case, $12,500. 14 charged 260 hours of professional time for the obsidian trial at a rate of $185 per hour. 18 received invoice from consultants wadsley and harden for $30,000 for expert testimony related to the obsidian trial. 27 applied office overhead at a rate of $62 per professional hour charged to the obsidian case. 31 paid administrative and support salaries of $28,500 for the month. 31 used office supplies for the month, $4,000. 31 paid professional salaries of $74,350 for the month. 31 billed obsidian $172,500 for successful defense of the case. required: a. provide the journal entries for each of these transactions. refer to the chart of accounts for exact wording of account titles. b. how much office overhead is over- or underapplied? c. determine the gross profit on the obsidian case, assuming that over- or underapplied office overhead is closed monthly to cost of services.