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    Conversion costs

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    Konrade Company uses a manufacturing process that has two distinct stages: the chopping process (P1) and the juicing process (P2). Raw material is consumed in P1 at the beginning of the process. No additional material is required in the second stage of the process (in P2). The following information pertains to the production of 5,000 units of output in March 2005:
    P1 P2
    Direct materials $60,000 $ 0
    Direct labor $20,000 $30,000
    Equipment maintenance $30,000 $40,000
    Plant depreciation $40,000 $50,000

    The conversion costs for P1, the chopping process, total?

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    Solution Summary

    This provide the steps to compute the conversion costs.