Which if the following are not conversion costs?
A) the cost of direct laborers who assemble the parts of an automobile
B) the cost of tires on an automobile
C) the cost of depreciation on an automobile assembly plant
D) the cost of electricity to run the tools in the automobile assembly plant

Question

Quizplus · Accepted Answer

Conversion costs refer to the costs incurred to transform raw materials into finished goods. Direct labor and overhead costs (such as depreciation and electricity) are examples of conversion costs, as they are directly related to the manufacturing or production process. The cost of tires, on the other hand, is not a conversion cost, as they are considered a direct material cost - a cost that is necessary to produce the finished product, but not directly related to the conversion process.

Which If the Following Are Not Conversion Costs