Which of the following costs incurred by a paper manufacturer would be included in the group of costs referred to as conversion costs?
A) machine operator's wages.
B) advertising costs.
C) lumber.
D) sales person salaries.

Question

Quizplus · Accepted Answer

Conversion costs are the costs incurred in the process of converting raw materials into finished goods. Machine operator's wages are directly associated with the manufacturing process and are considered part of the conversion costs. Advertising costs, lumber, and sales person salaries are not directly related to the conversion process and would not be included in conversion costs.

Which of the Following Costs Incurred by a Paper Manufacturer