Fleet Street Inc., a manufacturer of high-fashion clothing for women, is located in South London in the UK. Its product line consists of trousers (29%), skirts (27%), dresses (11%), and other (33%). Fleet Street has been using a volume-based rate to assign overhead to each product; the rate it uses is 2.20 per unit produced. The results for the trousers line, using the volume-based approach, are as follows:

Number of units produced14,000Price (all figures in )24.42Total revenue341,880Direct materials56,200Direct labor187,600Overhead (volume-based)30,800Total product cost274,600Nonmanufacturing expenses51,400Total cost326,000Profit margin for trousers15,880

Recently, Fleet Street conducted a further analysis of the trousers line of product, using ABC. In the study, eight activities were identified, and direct labor was assigned to the activities. The total conversion cost (labor and overhead) for the eight activities, after allocation to the trousers line, is as follows:

Pattern cutting33,060Grading28,200Lay planning27,500Sewing31,600Finishing20,900Inspection9,300Boxing up5,100Storage10,200

Required:

Determine the profit margin for trousers using ABC