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What would be value of conversion cost, if the cost of material consumed during the month is $5,000, labor incurred is $2,000 and FOH cost is $1,000?

A)  $3,000 B)  $5,000 C)  $7,000D)  $8,000

Accounting Cost Accounting Financial Reporting Financial Accounting Bookkeeping
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Question added by Muhammad Ramzan Tufail ACCA , Assistant Finance Manager , Eltizam Asset Management Group
Date Posted: 2015/06/29
Upvote (1) Views (9) Followers (6) Answers (5) Report Question
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mohamed Hakim CMA CPA Candidate
by mohamed Hakim CMA CPA Candidate , Accounting Manager , Andersen saudi arabia

Conversion costs = Direct labor + Manufacturing overhead

 

3000                    =    2000        +  1000

 

 

 

Zehab Osman
by Zehab Osman , Accountant , Aldar Consultancy Co.

A-------------------------------------------------------------------

Ahmed kandil
by Ahmed kandil , Cost Controller , Battour Holding Cpompany

correct answer is3000 

thank you 

 

Shahbaz Hayder
by Shahbaz Hayder , Group Head of Finance , Sharif Group of Companies

Option A is the right answer.

lakshminarasimham mallareddi
by lakshminarasimham mallareddi , Manager Finance & Accounts , M/s. Vandana Global Limited, Raipur, Chhattisgarh

Correct Answer is C) $7000 would be the conversion cost 

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