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Tramor Company reports the following cost data for its single product. The company regularly sells...

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Accounting

Tramor Company reports the following cost data for its single product. The company regularly sells 20,000 units of its product at a price of $80 per unit. If Tramor doubles its production to 40,000 units while sales remain at the current 20,000-unit level, by how much would the companys gross profit increase or decrease under absorption costing?

Direct Materials $10 per unit

Direct labor $12 per unit

Overhead costs for the year

Variable OH $3 per unit

Fixed OH per year $40000

Normal Production level in units 20000

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