It is easier for managerial accountants to estimate the degree of completion for direct-material costs than for conversion costs because quantities of direct materials in completed and partially-completed units are more accurately measured.

Question

Quizplus · Accepted Answer

Direct materials can be physically measured and tracked more easily than conversion costs, which include labor and overhead costs that are less tangible and more difficult to allocate accurately to specific units of production. Therefore, it is generally easier for managerial accountants to estimate the degree of completion and cost of direct materials in partially-completed units than for conversion costs.

It Is Easier for Managerial Accountants to Estimate the Degree