Conversion costs in a process cost system include:
A)Direct materials and direct labor.
B)Direct labor and manufacturing overhead.
C)Direct materials and manufacturing overhead.
D)Manufacturing overhead and selling, general & administrative expenses.

Question

Quizplus · Accepted Answer

Conversion costs refer to the costs involved in converting direct materials into a finished product. These costs include direct labor and manufacturing overhead, but not direct materials. Selling, general & administrative expenses are separate from conversion costs and generally include expenses not directly related to the manufacturing process.

Conversion Costs in a Process Cost System Include