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Sebastian Company manufactures and sells sportswear products. Sebastian uses activity-based costing to determine the cost of the customer return processing and the shipping activity. The customer return processing activity has an activity rate of $60 per return, and the shipping activity has an activity rate of $20 per shipment. Sebastian shipped 4,000 units of Product 1 in 800 shipments (some shipments are more than one unit). There were 90 returns.
Question 1: Determine the per-unit customer costs for combined shipping and returns of Product 1.
a. $5.35 per unit
b. $80 per unit
c. $1.38 per unit
d. $359.55 per unit
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