Grover Company has the following data for the production and sale of 2,000 units.
$$\begin{array} { l l r }
\text { Sales price per unit } & \$ \text { 800per unit } \
\text { Fixed costs: } & & \
\text { Marketing and adrinistrative } & \$ 400,000 \text { per period } \
\text { Marufacturing overhead } & \$ 200,000 \text { per period } \
\text { Variable costs: } & & \
\text { Marketing and adrinistrative } & \$ 50 \text { per unit } \
\text { Marnufacturing overhead } & \$ 80 \text { per unit } \
\text { Direct labor } & \$ 100 \text { perunit } \
\text { Direct Materials } & \$ 200 \text { per unit }
\end{array}$$
-
What is the conversion cost per unit?
A) $100
B) $180
C) $280
D) $380

Question

Grover Company has the following data for the production and sale of 2,000 units.
$$\begin{array} { l l r } 
\text { Sales price per unit } & \$  \text { 800per unit } \
\text { Fixed costs: } & & \
\text { Marketing and adrinistrative } & \$ 400,000 \text { per period } \
\text { Marufacturing overhead } & \$ 200,000 \text { per period } \
\text { Variable costs: } & & \
\text { Marketing and adrinistrative } & \$  50 \text {  per unit } \
\text { Marnufacturing overhead } & \$  80  \text { per unit } \
\text { Direct labor } & \$  100 \text {  perunit } \
\text { Direct Materials } & \$  200 \text { per unit }
\end{array}$$
-
What is the conversion cost per unit?
A) $100
B) $180
C) $280
D) $380

Quizplus · Accepted Answer

Conversion cost per unit is the sum of direct labor and manufacturing overhead (both fixed and variable). Here, it is $100 (direct labor) + $80 (variable manufacturing overhead) = $180.

Grover Company Has the Following Data for the Production and Sale