Inventory balances for Ray,Inc.,in March are as follows: $\begin{array}{lrr}
&\text { March 1}&\text { March 31}\
\text { Raw materials } & \$ 1,125 & \$ 875 \
\text { Work in process } & 2,000 & 1,550 \
\text { Finished goods } & 4,500 & 3,750
\end{array}$ During March,purchases of direct materials were $1,500.Direct labour and factory overhead costs were $2,500 and $3,500,respectively.
What were the conversion costs for March?
A)$6,000
B)$7,500
C)$7,750
D)$8,200

Question

Quizplus · Accepted Answer

Conversion costs are the sum of direct labor and factory overhead costs. For March, direct labor costs were $2,500 and factory overhead costs were $3,500, totaling $6,000.

Inventory Balances for Ray,Inc During March,purchases of Direct Materials Were $1,500