In the manufacture of 15,000 units of a product, direct materials cost incurred was $165,000, direct labor cost incurred was $105,000, and applied factory overhead was $53,500. What is the total conversion cost?
A) $270,000
B) $158,500
C) $323,500
D) $53,500

Question

Quizplus · Accepted Answer

Conversion cost includes direct labor cost and applied factory overhead cost. 
Total conversion cost = Direct labor cost + Applied factory overhead cost 
Total conversion cost = $105,000 + $53,500 
Total conversion cost = $158,500 
Therefore, the correct answer is B.

In the Manufacture of 15,000 Units of a Product, Direct