Intermediate AK Chemicals produces high-quality plastic sheet¬ ing in a continuous manufacturing operation. All materials are input at the beginning of the process. Conversion costs are incurred evenly throughout the process. A quality control inspection occurs 75% through the manufacturing process, when some units are separated out as inferior quality. The following data are available for December.

There is no opening or closing work in progress. Past experience indicates that approximately 7.5% of the units started are found to be defective on inspection by quality control.
What is the cost of abnormal loss for December A £3600 B £4050 C £4680 D £10 800

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Materials costs Conversion costs 90 000 70 200 Units started Units completed 40000 36000