If the costs for direct materials, direct labor, and factory overhead were $522,200, $82,700, and $45,300, respectively, for 16,000 equivalent units of production, the conversion cost per equivalent unit was $8.00.

Conversion Cost

The combined costs of direct labor and overhead expenses incurred to convert raw materials into finished products.

Equivalent Unit

A measure used in cost accounting to express the amount of work done on partially completed goods in terms of fully completed units.

Factory Overhead

Indirect manufacturing costs that are not tied directly to specific units of product, such as maintenance, utilities, and rent of a factory.