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Total manufacture cost minus direct material equal A- direct labor B- conversion cost C - Prime cost D- overhead ?

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Question added by Ahmed kandil , Cost Controller , Battour Holding Cpompany
Date Posted: 2016/03/10
Shameer Nazir Madari
by Shameer Nazir Madari , Assistant Finance Manager , METAL AND RECYCLING COMPANY K.S.C. (PUBLIC)

 

Answer is

Total manufacture cost minus direct material = A - direct labor & D – overhead

Because

Total manufacturing costs =

 

Direct materials + Costs of your direct labor + Manufacturing overhead

Peter Sequeira
by Peter Sequeira , Acountant , Milroc Good Earth Developers

B - Conversion cost. Labour and overheads are used to convert the raw material into useful products. Hence they become Conversion costs in the total manufacturing cost.

AHMED ABDELHADI
by AHMED ABDELHADI , Senior Tax Accountant , All Tax and Accounting Services Inc

Conversion cost is: the cost of changing materials into finished product, thus the correct answer is (B) 

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