Conversion Cost Is the Sum of

question 104

Multiple Choice

Conversion cost is the sum of

• A) product costs and period costs.
• B) selling cost and administrative costs.
• C) direct labor cost and direct materials costs.
• D) direct labor cost and overhead costs.

---

Definitions:

Direct Costs

Costs directly associated with the manufacturing of specific products or services, including labor and raw materials.

Indirect Costs

Expenses not directly tied to a specific project, product, or activity, such as administrative salaries and facility maintenance.

Office Equipment Depreciation

Office equipment depreciation is an accounting method to allocate the cost of office assets over their useful lives for reporting their wear and tear, usage, or obsolescence.

Factory Overhead

The total of all costs that are incurred to manufacture products, excluding the direct costs of labor and materials.