Total manufacturing costs equal ________.
A) direct materials plus prime costs
B) direct materials plus conversion costs
C) direct manufacturing labor costs plus sunk costs
D) direct manufacturing labor costs plus conversion costs

Question

Quizplus · Accepted Answer

Total manufacturing costs include the cost of direct materials and the cost of converting those materials into finished products, which is represented by conversion costs (i.e. direct manufacturing labor costs + manufacturing overhead costs). Therefore, option B, which states that total manufacturing costs equals direct materials plus conversion costs is the correct choice.

Total Manufacturing Costs Equal ________