Which of the following statements is true of conversion costs?
A) Estimating the degree of completion is usually easier for direct material costs than for conversion costs.
B) The calculation of equivalent units is relatively easy for the textile industry.
C) The conversion cost needed for a completed un0it and the conversion cost in a partially completed unit can be measured accurately.
D) If conversion costs are added evenly during the assembly we can conclude that there are more than one indirect-cost category.

Question

Quizplus · Accepted Answer

Estimating the degree of completion is usually easier for direct material costs than for conversion costs because direct materials are often added at specific points in the production process, whereas conversion costs (labor and overhead) are incurred continuously.

Which of the Following Statements Is True of Conversion Costs