Refer to the following data.The conversion costs are:

A) $150 000
B) $142 000
C) $182 000
D) $190 000

Question

Refer to the following data.The conversion costs are:

A) $150 000 
B) $142 000 
C) $182 000 
D) $190 000

Quizplus · Accepted Answer

Conversion costs include direct labor and manufacturing overhead. Direct labor cost is 22,000 + 40,000 + 46,000 = $108,000. Manufacturing overhead cost is 40% of the total prime cost ($200,000) which is $80,000. Therefore, total conversion cost is $108,000 + $80,000 = $188,000. The closest answer is C) $182,000 which is the best choice.

Refer to the Following Data.The Conversion Costs Are