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Calculate the conversion costs from the following information: Fixed manufacturing overhead $ 3,300 Variable manufacturing overhead 1,700 Direct materials 3,800 Direct labor 2,200

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PHEN0MENAL1

Answer:

Conversion costs = Manufacturing Overheads + Direct Labor Costs

= (Fixed Manufacturing Overheads + Variable Manufacturing Overheads) + Direct Labor Costs

= ( $ 3,300 + $ 1,700) + $ 2,200

= 5,000 + 2,200

= $ 7,200

Explanation:

Conversion costs refer to the expenses incurred for developing a product from raw materials. They are the manufacturing expenses comprising of Manufacturing Overheads and Direct Labor charges.

Note- Conversion costs exclude the costs of Direct Material.

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