Which of the following statements best describes conversion costs?
A) Conversion costs are all manufacturing and nonmanufacturing cost.
B) Conversion costs are all manufacturing costs other than direct materials costs.
C) Conversion costs are all nonmanufacturing costs including marketing costs.
D) Conversion costs are all nonmanufacturing costs other than fixed selling and distribution costs.

Question

Quizplus · Accepted Answer

Conversion costs are the costs incurred in converting raw materials into finished goods, which includes all manufacturing costs (such as direct labor and overhead) other than direct materials costs. Nonmanufacturing costs are not considered part of conversion costs.

Which of the Following Statements Best Describes Conversion Costs