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2 May, 20:40

The following costs are included in a recent summary of data for a company: advertising expense, $85,000; depreciation expense - factory building, $133,000; direct labor, $250,000; direct material used, $300,000; factory utilities, $105,000; and sales salaries expense, $150,000. Determine the dollar amount of conversion costs.

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  1. 2 May, 20:53
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    Conversion costs = $488,000

    Explanation:

    Giving the following information:

    depreciation expense - factory building, $133,000

    direct labor, $250,000

    factory utilities, $105,000

    The conversion costs are the sum of direct labor and manufacturing overhead.

    Manufacturing overhead = 133,000 + 105,000 = 238,000

    Direct labor = 250,000

    Conversion costs = $488,000
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