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Marta_Voda [28]
2 years ago
11

Benton Engineering Services Company incurred the following during 2016 Direct labor $94,000 Overhead 126,000 Selling expenses 11

2,000 Administrative expenses 102,000 Calculate prime cost and conversion cost for Benton Engineering Services Company during 2016.
Business
1 answer:
Galina-37 [17]2 years ago
8 0

Answer:

Prime cost = $94,000

<em>Conversion cost</em> =  $135,400.

Explanation:

<em>Prime cost is the addition of direct material cost , direct labor cost and direct expenses.</em>

<em>Conversion cost is the cost of converting raw materials into finished product. It s the sum of direct labour cost and production overheads.</em>

For Bento Engineering,

<em>Prime cost = direct labour cost  (since no figure is given for direct material and direct expenses.)</em>

Prime cost = $94,000

Conversion cost = Direct labour cost + overheads

<em>Conversion cost</em> = $94,000 + 126,000

                          =  $135,400.

Prime cost = $94,000

<em>Conversion cost</em> =  $135,400.

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