Prime Cost and Conversion Cost Grin Company manufactures digital cameras. In Jan

Question

Prime Cost and Conversion Cost Grin Company manufactures digital cameras. In January, Grin produced 4,000 cameras with the following costs: Direct materials, $400,000; Direct labor, $80,000; Manufacturing overhead, $320,000. There were no beginning or ending inventories of WIP. Refer to the information for Grin Company above. What was the total prime cost in January? $ What was the prime cost per unit in January? $ What was the total conversion cost in January? $ What was the conversion cost per unit in January? $

Explanation / Answer

1)prime cost =direct material +direct labor

                      = 400,000 + 80,000

                       = $ 480,000

2)per unit prime cost =480,000 / 4000

                           =$ 120 per unit

3)conversion cost = Direct labor +manufacturing overhead

                                = 80000 + 320000

                               = $ 400,000

4)per unit conversion cost = 400,000 /4000

                                            = $ 100 per unit

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