The computation of the total conversion costs based on the cost items of a manufacturer of basketball hoops is $52,000.
The company's conversion costs are made up of the direct labor costs and the total manufacturing overhead costs.
Data and Calculations:
a. Metal for rims, $12,000
b. Indirect materials, $5,000
c. Fiberglass backboards, $14,000
d. Insurance on factory, $8,000
e. Assembly worker wages, $20,000
f. Assembly supervisor salary, $9,000
g. Factory utilities, $4,000
h. Nets, $5,000
i. Assembly worker benefits, $6,000
b. Indirect materials, $5,000
d. Insurance on factory, $8,000
f. Assembly supervisor salary, $9,000
g. Factory utilities, $4,000
Total overhead costs = $26,000
e. Assembly worker wages, $20,000
i. Assembly worker benefits, $6,000
Total direct labor costs = $26,000
Thus, the total conversion costs based on the cost items of a manufacturer of basketball hoops is $52,000.
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