eBook Prime Cost and Conversion Cost Grin Company manufactures digital cameras.

Question

eBook Prime Cost and Conversion Cost Grin Company manufactures digital cameras. In January, Grin produced 6,750 cameras with the following costs Direct materials $760,000 128,000 608,000 Direct labor Manufacturing overhead There were no beginning or ending inventories of WIP Required: If required, round your answers to the nearest cent 1. What was the total prime cost in January? 2. What was the prime cost per unit in January? per unit 3. What was the total conversion cost in January? 4. What was the conversion cost per unit in January? per unit

Explanation / Answer

1)prime cost =direct material +direct labor

                      = 760,000 + 128,000

                       = $ 888,000

2)per unit prime cost = 888,000 / 6750

                           =$ 131.5 per unit

3)conversion cost = Direct labor +manufacturing overhead

                                = 128,000 + 608,000

                               = $ 736,000

4)per unit conversion cost = 736000 /6750

                                            = $ 109.03 per unit

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