Figure 2-12 Information from the records of the Conundrum Company for September 2014 was as follows:
Conundrum Corporation produced 20,000 units.
Refer to Figure 2-12. What are the conversion costs per unit?
A) $ 7.05
B) $ 8.8125
C) $ 12.1125
D) $ 14.7375

Question

Figure 2-12 Information from the records of the Conundrum Company for September 2014 was as follows:
  Conundrum Corporation produced 20,000 units.
Refer to Figure 2-12. What are the conversion costs per unit?
A) $ 7.05 
B) $ 8.8125 
C) $ 12.1125 
D) $ 14.7375

Quizplus · Accepted Answer

Conversion costs = Direct labor + Manufacturing overhead
Direct labor = $280,000 ÷ 20,000 units = $14 per unit
Manufacturing overhead = $170,000 ÷ 20,000 units = $8.50 per unit
Conversion costs per unit = $14 + $8.50 = $22.50
Therefore, the conversion costs per unit are $8.8125 (rounded to four decimal places).

Figure 2-12 Information from the Records of the Conundrum Company