Question

Prime Cost and Conversion Cost Benton Engineering Services Company incurred the following during 2019:
Direct labor $60,000
Overhead 110,000
Selling expenses 56,000
Administrative expenses 95,000
Calculate prime cost and conversion cost for Benton Engineering Services Company during 2019.

Answer 1

Answer:

Prime cost is $60,000

And, the conversion cost is $170,000

Explanation:

The computation of the prime cost and the conversion cost is shown below:

Prime cost is

= Direct material + Direct labor

= $0 + $60,000

= $60,000

And,

Conversion cost = Direct labor + Overhead

= $60,000 + $110,000

= $170,000

Basically we applied the above formula so that the prime cost and conversion cost could come