Labor and overhead are often grouped together and referred to as
A)prime costs.
B)conversion costs.
C)total manufacturing costs.
D)equivalent unit costs.

Question

Quizplus · Accepted Answer

Labor and overhead are both costs incurred during the conversion of raw materials into finished goods, so they are grouped together and referred to as conversion costs. A is incorrect because prime costs only include direct materials and direct labor. C is incorrect because total manufacturing costs include all costs incurred in the manufacturing process, including both prime costs and overhead expenses. D is incorrect because equivalent unit costs refer to the cost per unit of production, not the grouping of labor and overhead costs.

Labor and Overhead Are Often Grouped Together and Referred to as