Conversion costs include direct labor and overhead, but not direct material.

Name: Conversion costs include direct labor and overhead, but not direct material.
Brand: Quizplus
Rating: 4.9 (60 reviews)

Question

Quizplus · Accepted Answer

Conversion costs are the costs incurred to convert raw materials into finished goods, which include direct labor (the cost of workers directly involved in production) and manufacturing overhead (indirect costs related to production, such as factory utilities), but do not include direct material costs.

Conversion Costs Include Direct Labor and Overhead, but Not Direct