Question

The following information is available from the records of Kamond Cut, Inc.:Direct Materials-Assembly Department $10,000Direct Materials-Finishing Department 15,000Direct Labor-Assembly Department 11,000Direct Labor-Finishing Department 20,000Applied Overhead-Assembly Department 11,000Applied Overhead-Finishing Department 20,000Actual Overhead-Assembly Department 12,500Actual Overhead-Finishing Department 17,500a) What are the "total costs to account for" in the Assembly Department?b) What are the conversion costs in the Finishing Department?

Answer 1

a. Total cost in Assembly Department: $

Direct material 10,000

Direct labour 11,000

Applied overhead 11,000

Total cost 32,000

b. Conversion cost in Finishing Department

Direct labour 20,000

Applied overhead 17,500

Total conversion cost 37,500

Explanation: Total cost is the aggregate of direct material cost, direct labour cost and overhead.

Conversion cost is the aggregate of labour and overhead.