Question

View previous 2. TB MC Qu. 1-184 Vignana Corporation manufactures... 4 points Vignana Corporation manufactures and sells hand-painted clay figurines of popular sports heroes. Shown below are some of the costs incurred by Vignana for last year. 01221 Cost of clay used in production $66,000 Wages paid to the workers who paint the $94,000 figurines Wages paid to the sales manager's secretary $26,000 Cost of junk mail advertising $43,000 What is the total of the conversion costs above? Multiple Choice $94.000 $66.000

Answer 1

Conversion costs are those costs which turns or converts raw material into a product. Conversion cost includes direct and manufacturing overhead.

In the given question, cost of clay is raw material and not a conversion cost

Direct labor is the conversion cost.i.e., wages paid to the worker who paint the figurines at a costcost of $94,000

Therefore, option (a) is correct i.e., $94,000