Which of the following costs are conversion costs?
A) direct labor cost and factory overhead cost
B) direct materials cost and direct labor cost
C) factory overhead cost
D) direct materials cost and factory overhead cost

Question

Quizplus · Accepted Answer

Conversion costs refer to the costs incurred in the process of converting raw materials into finished goods. These costs include direct labor cost and factory overhead cost. Direct materials cost, on the other hand, refers to the cost of the materials used in the production process, while factory overhead cost refers to the indirect costs of production, such as rent and utilities. Therefore, the only option that includes both direct labor cost and factory overhead cost is A.

Which of the Following Costs Are Conversion Costs