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During September of the current year, ABC Company purchased $3,500,000 raw materials. During the month, ABC incurred $2,040,000 direct labor cost and applied 80% of direct labor cost. During the same month, there were changes in inventories as follows: Increase in raw materials $100,000; Decrease in work in process $150,000 and decrease in finished goods $75,000. How much is the conversion cost?  $3,672,000 $7,072,000 $5,640,000 $5,440,000

During September of the current year, ABC Company purchased $3,500,000 raw materials. During the month, ABC incurred $2,040,000 direct labor cost and applied 80% of direct labor cost. During the same month, there were changes in inventories as follows: Increase in raw materials $100,000; Decrease in work in process $150,000 and decrease in finished goods $75,000. How much is the conversion cost?  $3,672,000 $7,072,000 $5,640,000 $5,440,000

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter5: Process Costing
Section: Chapter Questions
Problem 8EB: A production department within a company received materials of $7,000 and conversion costs of $5,000...
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During September of the current year, ABC Company purchased $3,500,000 raw materials. During the month, ABC incurred $2,040,000 direct labor cost and applied 80% of direct labor cost. During the same month, there were changes in inventories as follows: Increase in raw materials $100,000; Decrease in work in process $150,000 and decrease in finished goods $75,000. How much is the conversion cost? 

$3,672,000

$7,072,000

$5,640,000

$5,440,000

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