Conversion costs are

A. direct materials plus direct labor.

B. direct materials plus manufacturing overhead.

C. indirect materials plus indirect labor.

D. direct labor plus manufacturing overhead.

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Reid WolffLv2

14 May 2018

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The two categories of cost comprising conversion costs are

a. Direct labor and factory overhead

b. Direct labor and indirect labor

c. Direct labor and direct materials

d. Factory overhead and direct materials

2-2 Define the following: (a) direct materials, (b) indirect materials, (c) direct labor, (d) indi- rect labor, and (e) manufacturing overhead.

Frizell Company is preparing its manufacturing overhead budgetfor 2011. Relevant data consist of the following.

Â· Units to beproduced (by quarters): 10,000, 12,000, 14,000, and 16,0

Â· Direct labor:Time is 1.5 hours per unit

Â· Variableoverhead costs per direct labor hour: Indirect materials $0.70;indirect labor $1.20; and maintenance $0.50

Â· Fixed overheadcosts per quarter: Supervisory salaries $35,000; depreciation$16,000; and maintenance $12,000

Prepare the manufacturing overhead budget for the year, showingquarterly data.

SEE ANSWER SHEET (WAY) BELOW...

**************************************************************************************************************************

	Quarter

	1	2	3	4	Year

Variable costs Indirect materials Indirect labor Maintenance Total variable Fixed costs Supervisorysalaries Depreciation Maintenance Total fixed Total manufacturing overhead Direct labor hours Manufacturing overhead rate ââper direct labor hour

Accounting 580,000