L L MV C FINDING PRODUCTION COSTS 200,000 300,000 1 Find factory overhead costs Conversion costs Prime costs Materials purchases Increase in materials inventory Decrease in work in process inventory 200,000 20,000 40,000 2 Find material costs Direct product costs are materials and direct labor Conversion costs are 300% of materials Indirect product costs are 50% of conversion costs Total manufacturing costs are P 600,000 3 Find total manufacturing costs Conversion costs are 40% of total mfg costs Direct labor is 25% of conversion costs Factory overhead is P 600,000