COST ACCOUNTING
PROCESS COSTING
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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$50, 400.
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$15, 600.
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$29, 520.
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$34, 800.
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Detailed explanation-1: -Conversion costs include direct labor and overhead expenses incurred as a result of the transformation of raw materials into finished products.
Detailed explanation-2: -How do you calculate conversion costs? Conversion costs are calculated by simply adding up all direct labor costs and manufacturing overhead costs. Direct labor costs are the labor costs that can be directly traced to a product.
Detailed explanation-3: -The total conversion cost formula is: Conversion Costs = Direct Labor Costs + Manufacturing Overheads.
Detailed explanation-4: -Materials added at the beginning means 100% complete since it has received all its materials. Materials or conversion costs added evenly means use the percent complete given. Remember, conversion costs means direct labor and overhead.