Question

Department S had no work in process at the beginning of the period. It added 12,800 units of direct materials during the period at a cost of $89,600; 9,600 units were completed during the period; and 3,200 units were 32% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. Direct labor was $53,800 and factory overhead was $9,900. The total conversion costs for the period were:________.

a. $53,800
b. $63,700
c. $9,900
d. $43,900

Answer 1

b. $63,700

Step-by-step explanation:

Conversion costs includes all the costs which incurred to convert raw material into finished goods. These costs includes direct and indirect labor and direct and indirect overhead costs.

Conversion cost = $53,800 +$9,900 = 63,700

As total cost incurred is available which is based on the activity level and overhead costs are mostly fixed costs which does not change with the change in the production level.