The following data pertains to Lam Co.'s manufacturing operations:
Additional information for the month of April:
Overhead is applied at $10 per direct labor hour.
For the month of April,conversion cost incurred was:
A)$30,000.
B)$40,000.
C)$70,000.
D)$72,000. Labor hours - $30,000/$7.50 = 4,000 hours Conversion of labor plus applied overhead = $30,000 + 4,000 x $10 = $70,000

Question

The following data pertains to Lam Co.'s manufacturing operations: 
Additional information for the month of April: 
Overhead is applied at $10 per direct labor hour.
For the month of April,conversion cost incurred was:
A)$30,000. 
B)$40,000. 
C)$70,000. 
D)$72,000. Labor hours - $30,000/$7.50 = 4,000 hours Conversion of labor plus applied overhead = $30,000 + 4,000 x $10 = $70,000

Quizplus · Accepted Answer

Based on the given information, we can calculate the conversion cost as follows:
- Labor cost incurred = $30,000
- Direct labor hours = Total labor cost incurred / Hourly wage rate = $30,000 / $7.50 per hour = 4,000 hours
- Applied overhead cost = Direct labor hours x Overhead rate = 4,000 hours x $10 per hour = $40,000
- Conversion cost = Labor cost incurred + Applied overhead cost = $30,000 + $40,000 = $70,000
Therefore, the correct answer is option C, which is $70,000.

The Following Data Pertains to Lam Co