Accounting for Decision Making and Control 6th Edition by Jerold Zimmerman

Exercise 19

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 overhead is assigned to products using direct labor dollars.