Horngren\'s managerial chapters-12 edition Chapter 20 S20-3 Calculating conversi

Question

Horngren's managerial chapters-12 edition Chapter 20 S20-3 Calculating conversion costs

Bananarama Plum Manufactures a juice blend. last month's total manufacturing costs for the Jupiter, FL operation included:

Direct materials $450,000

Direct labor 32,000

Manufacturing overhead 125,000

What was the conversion cost for Bananarama Plum's Jupiter operation last month?

Solution: Need to check if this is right

I am all mixed up when it comes to conversions costs any help will do.

Conversion costs = Direct labor + Manufacturing Overhead = answer here/ my guess (32,000) + answer here/my guess (450,000) = answer here/ my guess (125,000)

Explanation / Answer

Conversion costs = Direct labor + Manufacturing overhead

Conversion costs = $ 32,000 + $ 125,000

Conversion costs = $ 157,000

Note :

you are mistaken taken Direct material cost at the place of Manufacturing overhead

you have to sum the Direct labor and Manufacturing overhead. The total to be taken at a place of your given answer 125,000

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