Question

Conversion costs are:_______.
A. The direct labor costs associated with processing a product.
B. The combined costs of converting raw materials to finished goods.
C. The overhead costs associated with processing a product.
D. All the costs that go into the manufacturing of a product (DM, DL and OH).

Answer 1

Answer:

B. The combined costs of converting raw materials to finished goods.

Explanation:

Conversion Costs are the combined costs of converting raw materials to finished goods.

These include the costs of direct labor and manufacturing overheads such as water and electricity.