Which of the following costs are referred to as 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 are the costs required to convert raw materials into finished products. Direct labor cost and factory overhead cost are the two costs included in conversion costs, as they both directly contribute to the manufacturing process. Direct materials cost is not considered a conversion cost, as it only represents the cost of the raw materials used in production.

Which of the Following Costs Are Referred to as Conversion