The absorption costing according to the book, is commonly referred to as the full cost method. Manufacturing overhead costs are included in the production pricing of the units that are being produced, as well as the units that have not yet been completed. Based upon the question given, the level of production will most likely remain constant, and may increase in a curvilinear fashion if sales reports are positive. This is because the profits will not be reported on the income statement until the product is actually sold, so the managers will assume profits are low because of this. According to the literature, the manager would probably want to see an increase in sales and a decrease of inventory before they decide to continue with manufacturing