Which of the following statement(s)concerning conversion costs is correct?

Question

Quizplus · Accepted Answer

Estimating the degree of completion of direct materials is usually easier to calculate than estimating the degree of completion for conversion costs. This is because direct materials are usually added at the beginning of the production process, whereas conversion costs are incurred throughout the production process, making it more difficult to estimate the percentage of completion for those costs. Option A is incorrect because the ease of calculation of equivalent units would depend on the specific industry and production process. Option C is incorrect because estimates are commonly used in accounting and are considered acceptable as long as they are based on reasonable assumptions and methods. Option D is incorrect because only option B is correct.

Which of the Following Statement(s)concerning Conversion Costs Is Correct