Question

The following costs were incurred during the current month:

Direct materials $35,000
Direct labor $13,000
Factory overhead $15,000
Selling expenses $14,000
Administrative expenses $30,000
Conversion costs during the month totaled:
Group of answer choices
a.$28,000
b.$107,000
c.$48,000
d.$63,000

Answer 1

Conversion costs are the sum of direct labor and factory overhead. In this case, they total to $28,000, which is option (a).

Step-by-step explanation:

The concept of conversion costs involves the expenses incurred to convert raw materials into finished products. These costs include both direct labor and factory overhead. To determine the conversion costs during the month, we simply add the direct labor costs to the factory overhead costs.

1. Direct Labor: $13,000
2. Factory Overhead: $15,000

The total conversion costs are calculated as follows:

$13,000 (Direct Labor) + $15,000 (Factory Overhead) = $28,000

Therefore, the correct answer to the question is a. $28,000.