How is conversion cost calculated?
A)direct materials cost plus prime costs
B)indirect labour cost plus opportunity costs
C)product costs plus period costs
D)direct labour cost plus overhead cost

Question

Quizplus · Accepted Answer

Conversion cost is defined as the sum of direct labor cost and overhead cost. Therefore, option D, which states "direct labor cost plus overhead cost," is the correct choice for calculating conversion cost.

How Is Conversion Cost Calculated