15 In the manufacture of 10000 units of a product direct mat

15. In the manufacture of 10,000 units of a product, direct materials cost incurred was $165,000, direct labor cost incurred was $105,000, and applied factory overhead was $53,000. What is the total conversion cost? Please show your work

a) $218,000

b) $158,000

c) $323,000

d) $53,000

Solution

Calculate total conversion cost :

Total conversion cost = Direct labour+Applied factory overhead

= 105000+53000

Total conversion cost = 158000

so answer is b) $158,000