Asked by Morgan Kollman on Jul 24, 2024

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If the costs of direct materials, direct labor, and factory overhead were $277,300, $52,600, and $61,000, respectively, for 14,000 equivalent units of production, the total conversion cost was $390,900.

Conversion Cost

The total cost of converting raw materials into finished products, combining both direct labor and manufacturing overhead.

Equivalent Units

A measure used in cost accounting to express the amount of work done by incomplete units in terms of fully completed units.

Factory Overhead

All indirect costs associated with manufacturing, including indirect materials, indirect labor, and other expenses necessary for the production process.

  • Comprehend the function and computation of conversion costs in process costing.
  • Understand the treatment of direct materials, direct labor, and factory overhead expenses within a process costing framework.
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Verified Answer

TH
Tanner HearneJul 30, 2024
Final Answer :
False
Explanation :
The total conversion cost would be the sum of direct labor and factory overhead, which is $52,600+$61,000 = $113,600. Therefore, the given total conversion cost of $390,900 is incorrect.