Conversion costs are the sum of: a. fixed and variable overhead costs. b. labor costs and overhead costs. c. direct material costs and overhead costs. d. direct labor and indirect labor costs.

Question

Business

Amari Pacheco

1 December, 22:52

Conversion costs are the sum of: a. fixed and variable overhead costs. b. labor costs and overhead costs. c. direct material costs and overhead costs. d. direct labor and indirect labor costs.

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Answers (2)

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Reginald Gardner · Answer 1

b. labor costs and overhead costs.

Explanation:

Conversion cost is the cost of Conversion of raw material into finished goods. It usually includes the Labor cost and all overhead cost associated with the product. Direct material cost is not added in it because that is the cost to purchase the material not the convert the material. So, option b. labor costs and overhead costs. is correct.

Schroeder · Answer 2

The correct option is B, labor costs and overhead costs

Explanation:

Conversion costs are costs expended in converting materials to finished products, which implies that the actual costs of materials being manufactured is not included.

Labor costs is the actual amount paid to workers working directly on production lines, while overhead costs includes indirect labor costs, repair and maintenance costs as well as costs of utilities.