Yes, all 1956 Merc's had 312 engines. I beleive originaly rated at 225 HP, with an upgrade to 235 HP later in the model year.
The M-260 mercury engine kits were available from the parts counter only. Never on the assembly line. This kit included a 2x4 aluminum intake, two teapot 4 bbl carbs, Milled ECZ-Cheadsfor increased compression, and special cam, lifter and springs, along with some distributor parts I think. It was intended mainly for NASCAR racers, although I don't knoew if the used the entire jit or other carbs /cam etc.