Craigmont company's direct materials costs are $3,000,000, its direct labor costs total $7,000,000, and its factory overhead costs total $5,000,000. its conversion costs total:

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Business

Caleb Humphrey

13 December, 11:48

Craigmont company's direct materials costs are $3,000,000, its direct labor costs total $7,000,000, and its factory overhead costs total $5,000,000. its conversion costs total:

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Mckenzie Gill · Answer 1

Conversion cost is defined as the sum of direct labor costs and manufacturing overhead costs. It is the manufacturing cost needed to convert raw materials to a product. From the information given above, the conversion cost is the summation of direct material costs, direct labor costs and factory overhead costs.

$3000,000 + 7,000,000 + 5,000,000 = 15,000,000

Therefore, the conversion cost is $15,000,000.