Gildersleeve Corporation manufactures a product

Gildersleeve
Corporation manufactures a product that has the following costs:

Per
unit Per year

Direct
Materials $6.00

Direct
Labour 5.00

Variable
manufacturing overhead 4.00

Fixed
manufacturing overhead $360,000

Variable
SG&A expenses 5.00

Fixed
SG&A expenses 120,000The
company uses the absorption costing approach to cost-plus pricing.
The pricing calculations are based on budgeted production and sales
of 30,000 units per year.
The company has invested $600,000 in
this product and expects a return on investment of 15%.Required:a)
Compute the markup on absorption cost.
b) Compute the target
selling price of the product using the absorption costing approach.

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