Question

Inventory balances for Balmer Company in April 2018 are as follows:

a) April 1, 2018 April 30, 2018
b) Raw materials $40,000 $35,000
c) Work in process $67,500 $59,800
d) Finished goods $150,000 $120,000
During April, purchases of direct materials were $58,000. Direct labor and factory overhead costs were $82,000 and $110,000, respectively.
Conversion costs for April were:
a) $202,000
b) $168,000
c) $192,000
d) $178,000

Answer 1

The correct answer is c) $192,000.

The conversion costs for Balmer Company in April 2018 is the sum of Direct Labor costs ($82,000) and Factory Overhead costs ($110,000), which equals $192,000.

Step-by-step explanation:

The conversion costs for Balmer Company in April 2018 would be the sum of Direct Labor costs and Factory Overhead costs. Conversion costs refer to the expenses incurred in converting raw materials into finished products. According to the information provided, the direct labor costs incurred were $82,000 and the factory overhead costs were $110,000.

To calculate the total conversion costs, we simply add these two amounts:

Direct Labor Costs = $82,000
Factory Overhead Costs = $110,000

Therefore, Conversion Costs = Direct Labor Costs + Factory Overhead Costs
Conversion Costs = $82,000 + $110,000
Conversion Costs = $192,000

Hence, C