If the total conversion cost amounts to $2,000 and the manufacturing overhead is $7,000, what is the value of the direct labor cost involved in manufacturing?

Explanation

Conversion cost consists of direct labor cost plus manufacturing overhead. Given the conversion cost is $2,000 and manufacturing overhead is $7,000, the direct labor cost is calculated by subtracting overhead from conversion cost: $2,000 - $7,000 = -$5,000, which is not possible. Since the correct option is $13,000, it suggests a likely typo in the question. Assuming the conversion cost is $20,000 instead, direct labor cost = $20,000 - $7,000 = $13,000. Therefore, the direct labor cost is $13,000.