Step 1: Calculate the base area of the square.
The side of the square is given as 32 cm. Therefore, the base area \( A \) is:
\[
A = \text{side}^2 = 32 \times 32 = 1024 \, \text{sq. cm}
\]
Step 2: Find the slant height of the pyramid.
The slant height \( l \) is the hypotenuse of a right triangle formed by half the side of the base (16 cm) and the height of the pyramid (12 cm). Using the Pythagorean theorem:
\[
l = \sqrt{(16)^2 + (12)^2} = \sqrt{256 + 144} = \sqrt{400} = 20 \, \text{cm}
\]
Step 3: Calculate the lateral surface area.
The lateral surface area (C.S.A) of the pyramid is given by:
\[
\text{C.S.A} = \frac{1}{2} \times \text{Base Perimeter} \times \text{Slant Height}
\]
The perimeter of the base is:
\[
\text{Base Perimeter} = 4 \times \text{side} = 4 \times 32 = 128 \, \text{cm}
\]
Thus, the lateral surface area is:
\[
\text{C.S.A} = \frac{1}{2} \times 128 \times 20 = 1280 \, \text{sq. cm}
\]
Step 4: Calculate the total surface area.
The total surface area (T.S.A) of the pyramid is the sum of the lateral surface area and the base area:
\[
\text{T.S.A} = \text{C.S.A} + \text{Base Area} = 1280 + 1024 = 2304 \, \text{sq. cm}
\]
Final Answer: The correct answer is (b) 2304 sq. cm.