Jeffrey's Bottling Co.incurred the following costs during 2010:
If direct materials cost was $140,000 in 2010,what was the conversion cost for year 2010?
A)$255,000
B)$240,000
C)$215,000
D)$235,000 Direct Labor Cost = $220,000 - $140,000 = $80,000 Conversion Cost = $80,000 + $175,000 = $255,000

Question

Jeffrey's Bottling Co.incurred the following costs during 2010: 
If direct materials cost was $140,000 in 2010,what was the conversion cost for year 2010?
A)$255,000 
B)$240,000 
C)$215,000 
D)$235,000 Direct Labor Cost = $220,000 - $140,000 = $80,000 Conversion Cost = $80,000 + $175,000 = $255,000

Quizplus · Accepted Answer

Conversion cost includes both direct labor cost and manufacturing overhead cost. Given that total manufacturing costs were $395,000 and direct materials cost was $140,000, we can calculate the manufacturing overhead cost as $395,000 - $140,000 - $80,000 = $175,000. Therefore, the conversion cost for 2010 was $80,000 + $175,000 = $255,000, which corresponds to answer choice A.