Management of Mcgibboney Corporation has asked your help as an intern in preparing some key reports for November. Direct materials cost was $42,000, direct labor cost was $25,000, and manufacturing overhead was $62,000. Selling expense was $21,000 and administrative expense was $38,000. The conversion cost for November was:
A) $116,000
B) $79,000
C) $87,000
D) $129,000

Question

Quizplus · Accepted Answer

Conversion cost is the sum of direct labor cost and manufacturing overhead cost. So, 
Conversion cost = Direct labor cost + Manufacturing overhead cost
Conversion cost = $25,000 + $62,000 = $87,000
Therefore, the correct answer is option C.

Management of Mcgibboney Corporation Has Asked Your Help as an Intern