The following data pertains to Lam Co.%u2019s manufacturing operations: 4/1 4/30

Question

The following data pertains to Lam Co.%u2019s manufacturing operations:

4/1                 4/30

$18,000          $15,000

9,000              6,000

27,000                        36,000

Additional information for the month of April:

Direct materials purchased - $32,000

Direct labor - $30,000

Direct labor rate per hour - $10.00

Factor overhead incurred - $40,000

Overhead is applied at $12 per direct labor hour. For the month of April, conversion cost incurred was:

A. $75,000

B. $66,000

C. $70,000

D. $39,000

Explanation / Answer

Hi,

Please find the answer as follows:

Conversion of labor plus applied overhead =30000 + 30000/10*12 = 66000

Thanks.

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