Question

Calculate the conversion costs from the following information: Fixed manufacturing overhead $ 3,300 Variable manufacturing overhead 1,700 Direct materials 3,800 Direct labor 2,200

Answer 1

Conversion costs = Manufacturing Overheads + Direct Labor Costs

= (Fixed Manufacturing Overheads + Variable Manufacturing Overheads) + Direct Labor Costs

= ( $ 3,300 + $ 1,700) + $ 2,200

= 5,000 + 2,200

= $ 7,200

Step-by-step explanation:

Conversion costs refer to the expenses incurred for developing a product from raw materials. They are the manufacturing expenses comprising of Manufacturing Overheads and Direct Labor charges.

Note- Conversion costs exclude the costs of Direct Material.