Question

In: Accounting

Vignana Corporation manufactures and sells hand-painted clay figurines of popular sports heroes. Shown below are some...

Vignana Corporation manufactures and sells hand-painted clay figurines of popular sports heroes. Shown below are some of the costs incurred by Vignana for last year:

Cost of clay used in production $ 68,000
Wages paid to the workers who paint the figurines $ 95,000
Wages paid to the sales manager's secretary $ 27,000
Cost of junk mail advertising $ 44,000

What is the total of the conversion costs above?

Solutions

Expert Solution

Conversion cost consists of direct labor and manufacturing overhead cost. Here, direct labor is Wages paid to the workers who paint the figurines and there is no manufacturing overhead here.
Conversion cost = Wages paid to the workers who paint the figurines = 95000

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