Question

The conversion costs is inclusive of ________ and _________

• A. Direct labor, overhead expenses
• B. Indirect labor, overhead expenses
• C. Direct material, overhead expenses
• D. Indirect material, overhead expenses

Hint:

Conversion costs focus on the labor and overhead costs involved in the production process.

Answer 1

The Correct Option is A

Conversion costs include the direct labor and overhead expenses required to transform raw materials into finished products. These costs are essential for the production process but do not include the cost of raw materials, which is accounted for separately.