Question

The KIM Manufacturing Company makes custom golf clubs. The following information             pertains to a recent month's...

The KIM Manufacturing Company makes custom golf clubs. The following information

            pertains to a recent month's production activities:

Beginning Work in Process Inventory

$160,000

Ending Work in Process Inventory

120,000

Direct materials purchased

350,000

Direct materials placed in production

320,000

Direct labor costs incurred

140,000

Cost of goods manufactured

680,000

Cost of goods sold

750,000

What is the total amount of conversion costs incurred during the period?

Homework Answers

Answer #1

Calculation:

Cost of goods manufactured $680,000
Add: Ending work in process inventory $120,000
Deduct: Beginning work in process inventory ($160,000)
Total manufacturing costs $640,000
Deduct: Direct materials placed in production ($320,000)
Deduct: Direct labor cost ($140,000)
Manufacturing Overhead $180,000
Conversion Costs:
Direct labor cost $140,000
Manufacturing overhead $180,000
Conversion costs $320,000

Therefore, Conversion costs = $320,000.

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