Question

Taylor & Edwards Inc. manufactures television sets. Last month, direct materials (electronic components, etc.) costing $550,000 were put into production. Direct labor of $880,000 was incurred, manufacturing overhead equaled $495,000, and selling and administrative costs totaled $396,000. The company manufactured 8,400 television sets during the month. Assume that there were no beginning or ending work-in-process balances. What was the per-unit conversion cost? (Note: Round your answer to two decimal places.)

Answer 1

Answer:

$163.69 per unit

Explanation:

The computation of the conversion cost is shown below:

= Conversion cost ÷ number of units manufactured

where,

Conversion cost = Direct labor cost + manufacturing overhead cost

                            = $880,000 + $495,000

                            = $1,375,000

And, the number of units manufactured is 8,400 units

So, the per unit conversion cost equal to

= $1,375,000 ÷ 8,400 units

= $163.69 per unit