A company uses activity based costing. The total production overheads of $16,050 for the next period are for set up costs of $6,450 and quality inspection costs of $9,600. The company produces two products, Product F and Product G. Details relating to the next period are as follows:
A new customer has offered to purchase Product F for $28.00 per unit. The only costs incurred would be those shown above.
What is the profit per unit of Product F that would be gained by accepting the offer? Give your answer to two decimal places.
Answer: $3.90
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