The James Company has incurred the following costs of production:
Direct Materials $350,000
Direct Labor $475,000
Manufacturing Overhead $722,000
Selling and Administrative Costs $256,000
The James Company conversion costs are $1,197,000.
Conversion costs = Direct Labor $475,000 + Manufacturing Overhead = $1,197,000

Question

Quizplus · Accepted Answer

The calculation shown for conversion costs is correct. Direct labor and manufacturing overhead are added together to get the total conversion cost of $1,197,000.

The James Company Has Incurred the Following Costs of Production