Question

1. Which of the following costs are conversion costs?

	a.	direct materials cost and factory overhead cost
	b.	direct labor cost and factory overhead cost
	c.	factory overhead cost
	d.	direct materials cost and direct labor cost

2. Given the following data:

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Work in process, beginning	$14,000
Work in process, ending	20,000
Direct labor costs	4,000
Cost of goods manufactured	8,000
Factory overhead	8,000

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Direct materials used is

	a.	$2,000
	b.	$4,000
	c.	$14,000
	d.	$8,000

3.

Prime costs are

	a.	direct materials and factory overhead
	b.	direct labor and factory overhead
	c.	period costs and factory overhead
	d.	direct materials and direct labor

Answer 1

1.b.direct labour costs and factory overhead costs.

2.Cost of goods manufactured =Direct materials +Direct labour costs+Factory overhead assigned

Factory overhead assigned=Factory overhead incurred +Beginning WIP-Closing WOO

Hence factory overhead assigned =(8000+14000-20000)

=$2000

Hence direct materials =(8000-4000-2000)

=$2000

3. Prime costs are

D.d.direct material and direct labour