Management of Solman Corporation - solve for conversion cost
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Management of Solman Corporation has asked your help as an intern in preparing some key reports for June. The beginning balance in the raw materials inventory account was $21,500. During the month, the company made raw materials purchases amounting to $70,800. At the end of the month, the balance in the raw materials inventory account was $31,300. Direct labor cost was $24,400 and manufacturing overhead was $72,600. The beginning balance in the work in process account was $24,300 and the ending balance was $18,300. The beginning balance in the finished goods account was $54,200 and the ending balance was $56,900. Selling expense was $20,200 and administrative expense was $36,600.
The conversion cost for June was:
a.$97,000
b.$158,000
c.$143,400
d. $95,200
Please select the correct answer and explain briefly why.
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Solution Summary
Your tutorial guides you through the things that make the accounts rise and fall and then shows you how to "fill in" with the data given and solve for the needed amounts.
Solution Preview
This is basically a question about terminology (what is conversion cost). Conversion costs are the cost that it takes to "convert" materials into finished goods. That is, direct labor and overhead. ...
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