In May direct labor was 60% of conversion cost.If the manufacturing overhead for the month was $54,000 and the direct materials cost was $30,000, the direct labor cost was:

A) $36,000
B) $20,000
C) $81,000
D) $45,000

Conversion Cost

The expenses directly related to the transformation of raw materials into finished goods, including labor and manufacturing overhead costs.

Manufacturing Overhead

Indirect costs associated with manufacturing, such as maintenance, utilities, and quality control, not directly traceable to a specific product.

Direct Labor

Labor costs directly tied to the production of goods or services, which include wages for workers who physically produce a product.