Question

Last year, Buckner & Jones Company incurred the following costs: Direct materials $42,000 Direct labor 63,000 Manufacturing overhead 94,500 Selling expenses 25,200 Administrative expenses 23,100 Buckner & Jones produced and sold 2,060 units at a sales price of $131.25 each. Assume that beginning and ending inventories of materials, work in process, and finished goods were zero. What was the conversion cost per unit? (Note: Round answer to two decimal places.) a.$50.55 b.$95.00 c.$125.65 d.$76.46

Answer 1

d.$76.46

Step-by-step explanation:

The computation of the conversion cost per unit is shown below:

= (Direct labor cost + Manufacturing overhead cost) ÷ (number of units)

= ($63,000 + $94,500) ÷ (2,060 units)

= $157,500 ÷ 2,060 units

= $76.46

The conversion cost includes only direct labor cost and manufacturing overhead cost only. No other cost would be included. Hence, other costs will be ignored