Conversion costs are typically comprised of what two types of items?
A)management's discretion of certain production expenses
B)direct labour and indirect labour
C)manufacturing overhead and materials
D)direct labour and manufacturing overhead

Question

Quizplus · Accepted Answer

Conversion costs are the costs incurred to convert raw materials into finished goods. These costs include direct labour and manufacturing overhead costs. Direct labour includes wages and benefits paid to employees working directly on the production process, while manufacturing overhead includes all other indirect manufacturing costs such as rent, utilities, and supervisory salaries. Therefore, the two types of items that comprise conversion costs are direct labour and manufacturing overhead.

Conversion Costs Are Typically Comprised of What Two Types of Items