Question

Jeffrey's Bottling Company incurred the following costs during November: Conversion costs $ __________ Prime costs $ 220,000 Manufacturing overhead $ 175,000 If direct materials cost was $140,000 in November, what was the conversion cost for November? Multiple Choice $215,000 $250,000 $240,000 $235,000 $255,000

Answer 1

The conversion cost for Jeffrey's Bottling Company in November is $255,000, which was calculated by subtracting direct materials cost from prime costs and adding the manufacturing overhead.

Step-by-step explanation:

The question asks for the calculation of conversion costs for Jeffrey's Bottling Company during November.

Unpacking the details, we know that prime costs amount to $220,000, manufacturing overhead costs are $175,000, and direct materials cost is $140,000.

Prime costs consist of direct materials and direct labor. Therefore, to determine the conversion costs, which include direct labor and manufacturing overhead, we need to subtract the direct materials cost from the prime costs to find direct labor, and then add the manufacturing overhead.

To calculate the conversion costs: Prime Costs - Direct Materials + Manufacturing Overhead = Conversion Costs. Plugging in the numbers we have:

$220,000 (Prime Costs) - $140,000 (Direct Materials) + $175,000 (Manufacturing Overhead)

= $255,000 (Conversion Costs).