answersLogoWhite

0

Conversion Cost (CC) = Direct Labour (DL) + Manufacturing Overhead (MO)

CC = 35000 + (35000/40)*60

Therefor, M0 = (35000/40)*60 = 52500

User Avatar

Wiki User

18y ago

What else can I help you with?

Continue Learning about Accounting

Is the cost of direct materials classified as a conversion cost?

No, Conversion cost is the sum of direct labor cost and manufacturing overhead cost.


Is manufacturing overhead same as manufacturing cost?

No. Cost would include the cost of materials. Overhead would not.


The variable portion of the semi variable cost of electricity for a manufacturing plant is a conversion cost?

yes A cost that attaches to the physical units is termed a product cost. Product costs would include direct materials, direct manufacturing labor, and manufacturing overhead. Conversion cost is the cost involved in converting the direct materials into a finished product. It is composed of direct manufacturing labor and manufacturing overhead. Any cost that does not attach to the physical units would be termed a period cost and would be expensed as incurred. Therefore, a cost is either a period or a product cost. Electricity cost, whether variable or fixed, would be included in manufacturing overhead and classified as conversion costs, and therefore cannot be classified as a period cost.


Does prime cost plus conversion cost equal the cost of manufacturing?

Total Manufacturing Cost = Direct Material + Direct Labor + Factory Overheads Prime Cost = Direct material + Direct Labor Conversion Cost = Direct Labor + Factory Overhead So yes prime cost and conversion cost is equal to total manufacturing cost


How do you fine direct material cost per unit if you have the conversion prime and manufacturing cost per unit?

To find the direct material cost per unit, you can use the formula: Direct Material Cost per Unit = Total Manufacturing Cost per Unit - Conversion Cost per Unit. Here, the Total Manufacturing Cost includes both direct materials and conversion costs (labor and overhead). By subtracting the conversion cost from the total manufacturing cost, you isolate the direct material cost. Make sure to have accurate values for both the total manufacturing cost and conversion costs to ensure precision in your calculation.

Related Questions

Abel companys manufacturing overhead is 20 percent of its total conversion costs If direct labor is 38000 and if direct material are 47000 the manufacturing overhead is?

Well, honey, if manufacturing overhead is 20% of total conversion costs, and direct labor is $38,000 and direct materials are $47,000, then total conversion costs would be $38,000 + $47,000 = $85,000. So, if manufacturing overhead is 20% of that, it would be 0.20 x $85,000 = $17,000. So, the manufacturing overhead would be $17,000.


Is the cost of direct materials classified as a conversion cost?

No, Conversion cost is the sum of direct labor cost and manufacturing overhead cost.


Is Direct material cost combined with manufacturing overhead cost is known as conversion cost?

false, direct labor and manufacturing overhead = conversion cost


What is conversion costs?

Pricing is based on direct labor and overhead. Materials does not affect pricing. Example: Your customer provides materials used in production.


Is manufacturing overhead same as manufacturing cost?

No. Cost would include the cost of materials. Overhead would not.


Manufacturing overhead is 20 direct labor is 45000 and direct materials are 53000 what is the manufacturing overhead?

20


The variable portion of the semi variable cost of electricity for a manufacturing plant is a conversion cost?

yes A cost that attaches to the physical units is termed a product cost. Product costs would include direct materials, direct manufacturing labor, and manufacturing overhead. Conversion cost is the cost involved in converting the direct materials into a finished product. It is composed of direct manufacturing labor and manufacturing overhead. Any cost that does not attach to the physical units would be termed a period cost and would be expensed as incurred. Therefore, a cost is either a period or a product cost. Electricity cost, whether variable or fixed, would be included in manufacturing overhead and classified as conversion costs, and therefore cannot be classified as a period cost.


What is One potential cause of Total Manufacturing Overhead Variance?

If the estimated materials, labor or overhead costs allocated for a manufacturing order is different from the actual cost of the MO then the potential result is a Manufacturing Overhead Variance.


Does prime cost plus conversion cost equal the cost of manufacturing?

Total Manufacturing Cost = Direct Material + Direct Labor + Factory Overheads Prime Cost = Direct material + Direct Labor Conversion Cost = Direct Labor + Factory Overhead So yes prime cost and conversion cost is equal to total manufacturing cost


What if budgeted manufacturing overhead is not equal to applied manufacturing overhead?

There is a variance.


Is Conversion cost is the sum of direct labor and manufacturing overhead?

Yes conversion cost is sum of direct labor and overheads which required to run the process of production of units.


Direct materials plus direct labor plus variable overhead equals?

Total Manufacturing Cost