AK Chemicals produces high-quality plastic sheeting 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 date are available for December.

Materials costs

£90 000

Conversion costs

£70 200

Units started

40 000

Units completed

36 000

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 £3 600

B £4 050

C £4 680

D £10 800