Qudsi Company makes a product that has the following costs:

	Per Unit		Per Year
Direct materials	$	16.60
Direct labor	$	14.20
Variable manufacturing overhead	$	1.50
Fixed manufacturing overhead			$651,000
Variable selling and administrative expenses	$	3.20
Fixed selling and administrative expenses			$555,000

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 30,000 units per year.

The company has invested $550,000 in this product and expects a return on investment of 15%.

Required:
a.	Compute the markup on absorption cost. (Round your intermediate and final answer to 2 decimal places. Omit the "%" sign in your response.)

Markup on absorption cost

%

b.	Compute the selling price of the product using the absorption costing approach. (Round your intermediate and final answer to 2 decimal places. Omit the "$" sign in your response.)

Target selling price

$

c.	Assume that every 12% increase in price leads to a 15% decrease in quantity sold. Assuming no change in cost structure and that direct labor is a variable cost, compute the profit-maximizing price. (Round your intermediate and final answer to 2 decimal places. Omit the "$" sign in your response.)

Profit-maximizing price

$