Fleet Street Incorporated a manufacturer of high-fashion clothing for women, is located in South London in the UK. Its product line consists of trousers (21%), skirts (23%), dresses (14%), and other (42%). Fleet Street has been using a volume-based rate to assign overhead to each product; the rate it uses is 2.82 per unit produced. The results for the trousers line, using the volume-based approach, are as follows:

Number of units produced 11,000

Price (all figures in )31.30

Total revenue344,300

Direct materials56,700

Direct labor189,300

Overhead (volume-based)31,020

Total product cost277,020

Nonmanufacturing expenses51,600

Total cost328,620

Profit margin for trousers15,680

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 cutting	36,710
Grading	31,600
Lay planning	30,800
Sewing	35,100
Finishing	23,600
Inspection	10,400
Boxing up	5,600
Storage	11,200

Required:

1. Determine the profit margin for trousers using ABC.