Question

The estimated unit costs for a company to produce and sell a product at a level of 12,000 units per month are as follows: Cost Item Estimated Unit Cost Direct material $ 32 Direct labor 20 Variable manufacturing overhead 15 Fixed manufacturing overhead 6 Variable selling expenses 3 Fixed selling expenses 4 What are the estimated conversion costs per unit?

Answer 1

$41

Step-by-step explanation:

Conversion costs = Direct labor + Manufacturing overhead

Manufacturing overhead = Variable manufacturing overhead + Fixed manufacturing overhead

Manufacturing overhead = $15 + $6 = $21

Conversion costs = $20 + $21 = $41

Therefore, estimated conversion costs per unit

= $41