Question

THE Company applies overhead to products using a
pre-determined rate of $6 per direct labor hour.
During 2021, THE Company had the following costs:

Direct materials purchased ...........  $150,000
Direct labor .........................   175,000
Factory utilities ....................    39,000
Depreciation, office equipment .......    42,000
Advertising ..........................    26,000
Indirect labor .......................    17,000
Shipping goods to customers ..........    28,000
Property taxes, factory building .....    11,000

THE Company's inventory accounts for 2021 were:

                     January 1      December 31
Direct materials      40,000          33,000
Work in process       19,000          41,000
Finished goods        22,000          28,000

Direct labor workers are paid $12.50 per hour.

Part A.) The conversion costs for 2021 were equal to:

Group of answer choices

$227,000

$234,000

$241,000

$242,000

$259,000

$270,000

none of the above choices are correct

Part B.) The period costs for 2021 were equal to:

Group of answer choices

$113,000

$99,000

$95,000

$85,000

$70,000

$68,000

none of the above choices are correct

Answer 1