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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. 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 contribution margin increase or decrease under variable costing?

Direct materials$10per unit
Direct labor$12per unit
Overhead costs for the year
Variable overhead$3per unit
Fixed overhead per year$40,000
Selling and adminstrative costs for the year
Variable$2per unit
Fixed$65,200
Normal production level (in units)20,000units

Would the income be different if using variable costing instead of absorption costing?

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