In manufacturing, conversion costs are the expenses incurred to convert raw materials into finished goods. This calculator helps you estimate the conversion costs by considering labor and overhead costs.

## How to Calculate Conversion Cost

To calculate the conversion cost, follow these simple steps:

- Enter the total labor cost involved in production.
- Input the total overhead cost, which includes indirect costs like utilities, depreciation, etc.
- If you want to calculate the conversion cost per unit, enter the total number of units produced (optional).
- Click the 'Calculate Conversion Cost' button to get the total conversion cost.

### Formula Used

The conversion cost formula is:

**Total Conversion Cost = Labor Cost + Overhead Cost****Cost per Unit = Total Conversion Cost / Units Produced**(optional)

Using this formula, you can easily determine the total cost incurred to convert raw materials into finished products, as well as the cost per unit of production.

### Example Calculation

Let's say you have a labor cost of $5,000 and overhead costs of $3,000, and you produced 500 units. The total conversion cost would be:

**Total Conversion Cost = 5000 + 3000 = $8,000**

If you want to calculate the cost per unit, divide the total conversion cost by the number of units produced:

**Cost per Unit = 8000 / 500 = $16.00**

This gives you the total conversion cost as well as the cost per unit.