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Svetllana [295]
3 years ago
12

Compute conversion costs given the following data: direct materials, $361,300; direct labor, $195,300; factory overhead, $216,70

0 and selling expenses, $42,200. a.$412,000 b.$773,300 c.$578,000 d.$174,500
Business
1 answer:
Radda [10]3 years ago
8 0

Answer:

a. $412,000

Explanation:

Conversion cost is the combination of direct labor and manufacturing overhead which directly or indirectly are necessary to produce a product other than the direct raw materials.

We know,

<em>Conversion costs = Direct Labor + Manufacturing Overhead</em>

Here,

Manufacturing overhead = Indirect material + Indirect Labor + Indirect overhead (including variable and fixed overhead)

Given,

Direct labor = $195,300

Manufacturing overhead = Factory overhead = $216,700

Selling expenses will not be included because it is not a direct or indirect overhead expense.

Therefore,

<em>Conversion costs = </em>$195,300 + $216,700

<em>Conversion costs = </em>$412,000

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