Answer (B) is correct . Conversion costs consist of labor plus fixed and variable manufacturing overhead. The total is $41 ($20 + $15 + $6).
Answer (A) is incorrect because The amount of $35 properly includes direct labor but improperly includes only the variable portion of manufacturing overhead.
Answer (C) is incorrect because The amount of $44 properly includes direct labor and both components of manufacturing overhead but improperly includes a portion of selling expenses.
Answer (D) is incorrect because The amount of $48 properly includes direct labor and both components of manufacturing overhead but improperly includes selling expenses.
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Cole Lab’s estimated conversion costs per unit are
