Conversion Cost

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

31 July 2010 Hi All,

I have small doubt about overhead.

What are the contents to be considered to calculate conversion cost in pharma companies?

Shall we take Depreciation on Computers used in Factory and Depreciation on Furniture & Fixtures etc..?

Clarify me if you know practically..........

Thanks

CS Sunita Jamkhande

CS Sunita Jamkhande (Expert)
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31 July 2010 Any Product Mfg.cost includes material cost + conversion cost. Out of which material cost means lanaded material cost at the factory.Conversion cost basically means manufacturing cost includes all the cost incurred after receipt of material in the factory to complete the final product .Hence depreciation on all the assests used in the factory are considered in conversion cost.The main contains of conversion cost are variable cost and fixed cost these are labour salary ,mfg salary,power&Fuel,insurance,consumables,repairs &maintainance, depreciation on mfg assets and mfg.expenses.