Question

Help Save SER SU Saved Abbur Company's manufacturing overhead is 40% of its total conversion costs. If direct laboris $63,600 and if direct materials are $23,800, the manufacturing overhead is: Multiple Choice $15.867 S42,400 $95,400 558,267

Answer 1

traceable to the product manufactured therefore they solution conversion costs - Direct labor & manufacturing over head Let conversion cost be x tence X= 63600+ 0.4x 63600 = x-04 x 0.6x 63600 0.6 x= x = $ 106000 conversion cost Hence manufactursing oreshead 40% 106 000 - $ 42 400 2) Direct costs a cost of clay used in production+ wages paid to the workers who paint the figurines. $ 71000 + 84000 - $155000 option a' is correct NOTE: Wages paid to the Sales Managers secretary and cost of junk mail advertising are not are not directly are treated as period costs.