The following product costs are available for Arrez Company on the production of DVD cases: direct materials, $1,705; direct labor, $15.60; manufacturing overhead, applied at 150% of direct labor cost; selling expenses, $1,500; and administrative expenses, $1,050. The direct labor hours worked for the month are 100 hours. Round your answers to two decimal places. A. What are the prime costs? B. What are the conversion costs? C. What is the total product cost? D. What is the total period cost? $ S E. If 1,550 equivalent units are produced, what is the equivalent material cost per unit? $ F. What is the equivalent conversion cost per unit? 3,265 ✔ 3,900 ✔ 5,605 ✔ 2,550 ✔ 1.1 ✓
The following product costs are available for Arrez Company on the production of DVD cases: direct materials, $1,705; direct labor, $15.60; manufacturing overhead, applied at 150% of direct labor cost; selling expenses, $1,500; and administrative expenses, $1,050. The direct labor hours worked for the month are 100 hours. Round your answers to two decimal places. A. What are the prime costs? B. What are the conversion costs? C. What is the total product cost? D. What is the total period cost? $ S E. If 1,550 equivalent units are produced, what is the equivalent material cost per unit? $ F. What is the equivalent conversion cost per unit? 3,265 ✔ 3,900 ✔ 5,605 ✔ 2,550 ✔ 1.1 ✓
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The following product costs are available for Arrez Company on the production of DVD cases: direct materials, $1,705; direct labor, $15.60; manufacturing
overhead, applied at 150% of direct labor cost; selling expenses, $1,500; and administrative expenses, $1,050. The direct labor hours worked for the month
are 100 hours. Round your answers to two decimal places.
A. What are the prime costs?
B. What are the conversion costs?
C. What is the total product cost?
D. What is the total period cost?
E. If 1,550 equivalent units are produced, what is the equivalent material cost per unit? $
F. What is the equivalent conversion cost per unit?
$
$
3,265 ✓
3,900 ✔
5,605 ✔
2,550
1.1
✓
Expert Solution
Step 1: Introduction:
The production costs required to convert finished goods from raw materials are known as conversion costs. Cost accounting applies the idea to determine the value of ending inventory, which is then reflected in the balance sheet. Conversion costs, as used in cost accounting, are the total of direct labor expenses and manufacturing overhead costs.
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