Direct labour costs plus factory overhead costs are known as:

Question

Quizplus · Accepted Answer

Direct labour costs and factory overhead costs are referred to as conversion costs because they are the costs incurred in converting raw materials into finished products. Prime costs refer to direct materials and direct labour costs only, while direct costs encompass any costs that can be directly attributed to a product or service. Variable costs refer to costs that vary in direct proportion to changes in activity levels.

Direct Labour Costs Plus Factory Overhead Costs Are Known As