Explore BrainMass

Explore BrainMass

    Prime cost, conversion cost and total cost

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Star Repairs Co. does all the repair work for a medium-sized manufacturer of handheld computer
    games. The games are sent directly to Star, and after the games are repaired, Star bills the game
    manufacturer for cost plus a 20 percent markup. In the month of February, purchases of parts
    (replacement parts) by Star amounted to $97,000, the beginning inventory of parts was $38,500,
    and the ending inventory of parts was $15,250. Payments to repair technicians during the month of
    February totaled $52,500. Overhead incurred was $121,000.
    a. What was the cost of materials used for repair work during the month of February?
    b. What was the prime cost for February?
    c. What was the conversion cost for February?
    d. What was the total repair cost for February?

    © BrainMass Inc. brainmass.com June 4, 2020, 5:27 am ad1c9bdddf
    https://brainmass.com/business/accounting/prime-cost-conversion-cost-total-cost-627282

    Solution Preview

    Solution:

    1. Cost of materials used for repair work = Beginning inventory + Material purchases - Ending ...

    Solution Summary

    Star Repairs Co. does all the repair work for a medium-sized manufacturer of handheld computer
    games. The games are sent directly to Star, and after the games are repaired, Star bills the game
    manufacturer for cost plus a 20 percent markup. In the month of February, purchases of parts
    (replacement parts) by Star amounted to $97,000, the beginning inventory of parts was $38,500,
    and the ending inventory of parts was $15,250. Payments to repair technicians during the month of
    February totaled $52,500. Overhead incurred was $121,000.
    a. What was the cost of materials used for repair work during the month of February?
    b. What was the prime cost for February?
    c. What was the conversion cost for February?
    d. What was the total repair cost for February?

    $2.19

    ADVERTISEMENT