Question
Ramort Company reports the following cost data for its single product. The company regularly sells 20,000 units of its product at a price of $60
Ramort Company reports the following cost data for its single product. The company regularly sells 20,000 units of its product at a price of $60 per unit. Direct materials $ 10 per unit Direct labor $ 12 per unit Overhead costs for the year Variable overhead $ 3 per unit Fixed overhead per year $ 40,000 Selling and adminstrative costs for the year Variable $ 2 per unit Fixed $ 65,200 Normal production level (in units) 20,000 units If Ramort doubles its production to 40,000 units while sales remain at the current 20,000 unit level, by how much would the company's gross margin increase or decrease under absorption costing?
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