Conversion costs consist of
A)direct materials costs and direct labor costs.
B)direct labor costs and overhead costs.
C)direct materials costs and overhead costs.
D)direct labor costs and indirect labor costs.

Question

Quizplus · Accepted Answer

Conversion costs include the cost of direct labor and overhead expenses, such as utilities and rent. Direct materials costs are not considered conversion costs because they are part of the production process but occur before conversion. Indirect labor costs are also not considered conversion costs, as they are not directly related to the production of a product or service.

Conversion Costs Consist of