Job 31 has a direct materials cost of 220 and a total manufa

Job 31 has a direct materials cost of $220 and a total manufacturing cost of $580. Overhead is applied to jobs at a rate of 200 percent of direct labor cost. Use the relationships among total manufacturing costs, conversion cost, and prime cost to determine the following costs for job 31:

Solution

Direct Materials Cost = $220
Total Manufacturing Cost = $580
Direct Labor Cost = $120

Manufacturing Overhead Cost = 200% * Direct Labor Cost
Manufacturing Overhead Cost = 200% * $120
Manufacturing Overhead Cost = $240

Prime Cost = Direct Materials Cost + Direct Labors Cost
Prime Cost = $220 + $120
Prime Cost = $340

Conversion Cost = Direct Labor Cost + Manufacturing Overhead Cost
Conversion Cost = $120 + $240
Conversion Cost = $360