Special Joe manufactures caffeinated water. Last month's total manufacturing costs were:
$$\begin{array} { | l | r | }
\hline \text { Direct materials } & \$ 500,000 \
\hline \text { Direct labor } & \$ 50,000 \
\hline \text { Manufacturing overhead } & \$ 250,000 \
\hline
\end{array}$$ What was the conversion cost for Special Joe for last month?
A) $300,000
B) $800,000
C) $250,000
D) $500,000

Question

Special Joe manufactures caffeinated water. Last month's total manufacturing costs were:
$$\begin{array} { | l | r | } 
\hline \text { Direct materials } & \$ 500,000 \
\hline \text { Direct labor } & \$ 50,000 \
\hline \text { Manufacturing overhead } & \$ 250,000 \
\hline
\end{array}$$ What was the conversion cost for Special Joe for last month?
A) $300,000
B) $800,000
C) $250,000
D) $500,000

Quizplus · Accepted Answer

Conversion costs are the sum of direct labor and manufacturing overhead costs, which in this case is $50,000 + $250,000 = $300,000.

Special Joe Manufactures Caffeinated Water What Was the Conversion Cost for Special Joe for Last