Conversion costs total is$ 6,70,0000. conversion costs total is substract Prime cost and overhead costs total is equal.The primary costs associated with running a plant are labor and raw material costs. Because these are the essential components of production, they are referred to be prime.
The primary costs associated with running a plant are labor and raw material costs.
Prime cost = material cost + labour cost is equal to
$4,700,000 +$8,530,000 = 13,230,000
conversion costs total is substract Prime cost and overhead costs total is equal.
conversion costs total is Prime cost - overhead costs total is equal
13,230,000 - 6,530,000 = $ 6,70,0000.
Simply summing up all direct labor costs and manufacturing overhead costs yields conversion costs. The labor costs that can be directly linked to a product are known as direct labor costs.
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