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.


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