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Gorlami S.p.A. produces automotive accessories that it sells for €110 each. The 2021 data are the following:
Units produced 1,560
Units sold 1,400
Variable materials per unit €34
Variable labor per unit €18
Sales commission cost per unit €7
Total fixed manufacturing overhead €49,920
Total fixed selling and administrative costs €1,550
Required:
a) Compute the product cost per unit under absorption costing and under variable costing.
b) Calculate the contribution margin ratio.
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