Qudsi Company makes a product that has the following costs:

	Per Unit		Per Year
Direct materials	$	16.80
Direct labor	$	14.40
Variable manufacturing overhead	$	1.70
Fixed manufacturing overhead			$700,800
Variable selling and administrative expenses	$	3.40
Fixed selling and administrative expenses			$557,000

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 32,000 units per year.

The company has invested $570,000 in this product and expects a return on investment of 14%.

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 14% increase in price leads to a 17% 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

$