The following costs were incurred in May: Conversion costs during the month totaled:
A)$54,000
B)$133,000
C)$59,000
D)$87,000

Question

The following costs were incurred in May:  Conversion costs during the month totaled:
A)$54,000 
B)$133,000 
C)$59,000 
D)$87,000

Quizplus · Accepted Answer

Conversion costs include direct labor and overhead costs. In this case, we are not given any information about direct labor costs. However, we are given the following information about overhead costs:
Indirect materials used = $15,000
Indirect labor incurred = $22,000
Factory rent = $9,000
Factory utilities = $13,000

Adding these costs together gives us a total of $59,000 (Option C) for conversion costs during the month of May. Conversion cost = Direct labor + Manufacturing overhead
= $13,000 + $46,000 = $59,000

The Following Costs Were Incurred in May: Conversion Costs