Question: GAMMA produces over a hundred different types of residential water

GAMMA produces over a hundred different types of residential water faucets at its Delta, Florida, plant. This plant uses activity- based costing to calculate product costs. The following table summarizes the plant’s overhead for the year and the cost drivers used for each activity center:


One faucet model GAMMA manufactures is Explorer. Its total product cost is as follows:


Required:
Calculate the product cost per unit of the Explorer faucet using absorption costing where plant over-head is assigned to products using direct labordollars.
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  • CreatedDecember 15, 2014
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