If the costs for direct materials, direct labor, and factory overhead were $522,200, $82,700, and $45,300, respectively, for 16,000 equivalent units of production, the conversion cost per equivalent unit was $8.00.

Question

Quizplus · Accepted Answer

Conversion cost per equivalent unit is calculated by dividing the total cost of direct labor and factory overhead by the total equivalent units of production.

Total cost of direct labor and factory overhead = $82,700 + $45,300 = $128,000

Total equivalent units of production = 16,000

Conversion cost per equivalent unit = $128,000 / 16,000 = $8.00

Therefore, the statement is true.

If the Costs for Direct Materials, Direct Labor, and Factory