Question

Belleview Orange manufactures orange juice. Last​ month's total manufacturing costs for the Duval operation​ included:

Direct materials $500,000
Direct labor 39,000
Manufacturing overhead 115,000
Required:
a. What was the conversion cost for Belleview ​Orange's Duval operation last​ month?

Answer 1

The conversion cost for Belleview ​Orange's Duval operation last​ month was $154,000

Step-by-step explanation:

Conversion costs are those production costs required to convert raw material to finished goods. Conversion costs include direct labor and manufacturing overheads.

Conversion Costs = Direct Labor cost + Manufacturing Overheads cost = Total Manufacturing Cost – Direct Material cost.

Last month, in Belleview ​Orange's Duval, Direct labor cost was incurred of $39,000, Manufacturing overhead cost was incurred of $115,000

Conversion Cost = $39,000 + $115,000 = $154,000