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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