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    siemen's Avatar
    siemen Posts: 1, Reputation: 1
    New Member

    Jan 29, 2007, 07:58 PM
    Manufacturing overhead
    Company's manufacturing overhead is 20% of it's total conversion cost. If direct labor is $45,000 and direct materials are $53,000, the manufacturing overhead is? How do I figure this?
    KongTheKonqueror's Avatar
    KongTheKonqueror Posts: 75, Reputation: 13
    Junior Member

    Feb 2, 2007, 09:59 PM
    Conversion costs consist of direct labor and factory overhead. You can ignore the direct materials. It was just included to try to confuse you.

    Overhead=.20 Overhead + 9,000
    .80 Overhead = 9,000
    Overhead = 11,250

    Conversion Costs = 11,250+45,000=56,250
    Overhead = 56,250*.20=11,250

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