Excellent Inc. had a per-unit conversion cost of $3.00 during April and incurred direct materials cost of $112,000, direct labor costs of $84,000, and manufacturing overhead costs of $50,400 during the month. How many units did it manufacture during the month?

Question

Business

Reagan Sexton

30 May, 09:06

Excellent Inc. had a per-unit conversion cost of $3.00 during April and incurred direct materials cost of $112,000, direct labor costs of $84,000, and manufacturing overhead costs of $50,400 during the month. How many units did it manufacture during the month?

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Answers (1)

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Jolie Osborn · Answer 1

Units produced = 44,800 units

Explanation:

Conversion cost is defined as the cost incurred when a company converts rawaterial to finished goods. Direct labour cost plus manufacturing overhead is equal to conversion cost. When you divide this figure by total unit you will get conversion cost per unit.

Conversion cost is also cost of production less cost of raw materials.

Conversion cost per unit = (direct labour cost+manufacturing overhead cost) / units produced

3 = (84,000+50,400) / units produced

Cross-multiply

Units produced = (84,000+50,400) / 3

Units produced = 44,800 units