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On October 1, Year 1, World Mattress Corp. (WMC) entered into a contract to sell 1,000 mattresses at $120 per mattress over the next year.

On October 1, Year 1, World Mattress Corp. (WMC) entered into a contract to sell 1,000 mattresses at $120 per mattress over the next year. At its December 31, Year 1, year end, WMC had delivered only 200 mattresses. Its assessment of the costs related to the remaining 800 mattresses at that time required WMC to record a loss on an onerous contract of $4,000. By its March 31, Year 2, quarterly reporting, WMC had not yet delivered its final 800 mattresses. During the quarter ended March 31, Year 2, the costs of WMC's materials increased due to a global health crisis to $135 per mattress. The company has determined a total provision of $12,000 is needed at March 31 for the unfulfilled contract. WMC uses IFRS for reporting its financial results on a quarterly basis. What adjustment to the provision does WMC need to record at March 31, Year 2? A. Increase the provision for the onerous contract by $8,000. B. No adjustment to the provision for the onerous contract is required. C. Increase the provision for the onerous contract by $12,000. D. Increase the provision for the onerous contract by $11,000

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