Question

Direct materials for a company were $500,000; manufacturing overhead was $250,000; and direct labor was $770,000. Conversion costs would totalA) $1,020,000.B) $1,270,000.C) $1,520,000.D) $750,000.

Answer 1

Answer:

A) $1,020,000

Explanation:

Conversion cost = All the cost incurred to convert raw material into finished goods, this only includes direct labor cost and manufacturing cost.

Thus, here as for provided information,

Manufacturing overhead = $250,000

Direct Labor = $770,000

Thus, conversion cost = $250,000 + $770,000 = $1,020,000

Conversion cost is the cost of efforts made to convert raw material to finished goods, but it does not include raw material cost.

A) $1,020,000

Answer 2

Answer:

conversion cost of the compnay is $1020000

Explanation:

Given data:

Direct material = $500, 000

Manufacturing overheads = $250,000

Direct labor cost = $770,000

conversion cost  is given as

conversion cost = direct labor cost + manufacturing overheads

PUTTING ALL VALUE TO GET  CONVERSION COST VALUE

conversion cost = 770000+250000 = $1020000

thereforer conversion cost of the compnay is $1020000