The following product costs are available for Arrez Company on the production of DVD cases: direct materials, $1,705; direct labor, $15.60; manufacturingoverhead, applied at 150% of direct labor cost; selling expenses, $1,500; and administrative expenses, $1,050. The direct labor hours worked for the monthare 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 ✔2,5501.1✓

Answered: The following product costs are…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 2PA: The following product costs are available for Arrez Company on the production of DVD cases: direct...

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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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