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Nance Corporation is about to introduce a new product. The following costs would be incurred if 48,000 units are produced and sold each year: Per

Nance Corporation is about to introduce a new product. The following costs would be incurred if 48,000 units are produced and sold each year:

Per Unit Total
Variable production costs $ 12 $ 576,000
Fixed production costs $ 8 $ 384,000
Variable selling and administrative costs $ 4 $ 192,000
Fixed selling and administrative costs $ 6 $ 288,000

Nance Corporation uses the absorption costing approach to cost-plus pricing as described in the text.

Assume that the company has not yet determined a markup to use on the new product. The new product would require an investment of $1,100,000. The company requires a 20% rate of return on investment in all new products. The markup under the absorption costing approach would be closest to:

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