A manufacturing concern has Raw material of worth Rs. 100,000, Direct Labor Rs. 75,000 and Factory Overhead Rs. 50,000. The amount of

RS125000

C) Rs.125,000  

C)125000

Conversion Cost= Direct Labor + Factory Overhead

125,000

C 

Conversion costs are the combination of direct labor costs plus manufacturing overhead costs.You can think of conversion costs as the manufacturing or production costs necessary to convert raw materials into products. Expressed another way, conversion costs are a manufacturer's product or production costs other than the costs of raw materials.

Right Answer is Option C) Rs.125,000

Option is C 

Conversion Cost = Direct labor (75,000 ) + FOH (50,000)

                            = Rs125,000

There are two components in the conversion cost: manufacturing overhead cost such as utilites, electricity, maintenance cost, and direct labour cost. The correct answer is50,000+75,000=1,25000

Answer is C

Rs.75000 + Rs.50000 =  Rs.125000/- is the conversion cost