Companies that use automated production processes often condense the three manufacturing costs into two categories: direct materials and conversion costs.

Question

Quizplus · Accepted Answer

This statement is true. Direct materials and conversion costs are the two main categories of manufacturing costs used by companies that utilize automated production processes. Direct materials refer to the cost of the raw materials that are directly used in the creation of the final product, while conversion costs include labor, overhead, and other expenses related to transforming the raw materials into finished goods.

Companies That Use Automated Production Processes Often Condense the Three