Quamma Corporation makes a product that has the following costs:

Per UnitPer YearDirect materials$16.50Direct labor$14.10Variable manufacturing overhead$1.40Fixed manufacturing overhead$626,400Variable selling and administrative expenses$3.10Fixed selling and administrative expenses$554,000

The company uses the absorption costing approach to cost-plus pricing as described in the text. The pricing calculations are based on budgeted production and sales of 29,000 units per year.

The company has invested $540,000 in this product and expects a return on investment of 12%.

Required:

a. Compute the markup on absorption cost.(Round your intermediate and final answer to 2 decimal places.)

b. Compute the selling price of the product using the absorption costing approach.