All categories

3 years ago

TP2. LO 5.2Why are labor and manufacturing overhead grouped together as conversion costs?

Business

1 answer:

Levart [38]3 years ago

5 0

Answer:

Explanation:

Conversion cost is the cost that is required to convert the raw material into a product. It is a mix of direct labor costs and the manufacturing overhead cost. It is also known as production cost which is required to produce the product

In mathematically,

Conversion cost = Direct labor cost + manufacturing overhead cost

It excludes the direct material cost

These two costs are required to convert the raw material into the final product

The examples of conversion cost are indirect labor, repairs and maintenance charges,etc

You might be interested in

Bob's Clothing Shop's inventory at cost was $30,000 on January 1. Its retail value is $42,000. During the year, Bob's Clothing S

DENIUS [597]

Answer:

Ending Inventory = $55,000

Explanation:

<u>Particular Cost price Retail price </u>

Opening Inventory $30,000 $42,000

<u>Add: Additional Purchases $196,000 $368,000 </u>

<u>Cost of Goods Available for Sale $226,000 $410,000 </u>

Cost to Retail Ratio: 55 %

Less: Net Sales $310,000

Ending Inventory $55,000 $100,000

Note:

Cost to Retail Ratio = $226,000 / $410,000

Cost to Retail Ratio = 55% (Approx)

6 0

3 years ago

Which of the following would most likely be treated as an activity in an activity-based costing system? direct materials cost sa

Novosadov [1.4K]

Answer: the correct answer is machine processing

Explanation:

Activity-based costing (ABC) is an accounting method that identifies and assigns costs to overhead activities and then assigns those costs to products. Indirect costs, such as management and office staff salaries, are sometimes difficult to assign to a product.

8 0

4 years ago

An asset which costs $97,600 and has accumulated depreciation of $82,000 is sold for $18,000. what amount of gain or loss will b

frutty [35]

Book value
Cost of an asset-accumulated dep
97,600−82,000=15,600

So
18,000−15,600=2,400
a gain of $2,400.

Hope it helps

8 0

4 years ago

Denver, Incorporated, has sales of $14.2 million, total assets of $11.3 million, and total debt of $4.9 million. Assume the prof

My name is Ann [436]

The net income of Denver Incorporated is $0.71 million.

<h3> What is profit margin? </h3>

Profitability margin is an example of a profitability ratio. Profitability ratios measures the efficiency that a business uses to derive profit from its assets. Profit margin measures the return on sales

Profit margin = net income / net sales

<h3>What is the net income? </h3>

5% = net income / $14.2 million

Net income = $14.2 million x 0.05 = $0.71 million

To learn more about financial ratios, please check: brainly.com/question/26092288

6 0

2 years ago

What Is One Reason Why Inflation Can Occur

GrogVix [38]

Answer:

Both types of inflation cause an increase in the overall price level within an economy. Demand-pull inflation occurs when aggregate demand for goods and services in an economy rises more rapidly than an economy's productive capacity.

Explanation:

8 0

3 years ago

Read 2 more answers