Which of the following assertions is true concerning conversion costs?
A) Direct labour costs are always included in conversion costs.
B) The conversion period (for conversion costs calculation) can only include one operation.
C) When conversion costs are estimated to be over 80% complete, then the cost-benefit constraint requires us to use 100% as the estimate.
D) Conversion costs are impossible to estimate with any reliability.
E) The conversion period often includes several operations, and it may be impossible to estimate conversion costs with any reliability in some cases.

Question

Quizplus · Accepted Answer

The conversion period often includes several operations, and it may be impossible to estimate conversion costs with any reliability in some cases. Direct labour costs are not always included in conversion costs, and there is no requirement to use 100% as the estimate when conversion costs are estimated to be over 80% complete. The conversion period can include multiple operations. Therefore, option E is the correct answer.

Which of the Following Assertions Is True Concerning Conversion Costs