Which of the Following Is Not Included in Conversion Costs

question 96

Multiple Choice

Which of the following is not included in conversion costs?

• A) direct labor
• B) factory overhead
• C) indirect labor
• D) direct materials

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Definitions:

Direct Labor Cost

The total cost of labor directly involved in the production of goods, including wages and benefits for the workers on the production line.

Variable Costing

An accounting technique that considers only variable costs - those that vary with production levels - when calculating the cost of producing goods.

Net Operating Income

The earnings a business retains following the subtraction of operational costs, not including interest and taxes.

Net Operating Income

The financial gain a company receives from its essential business operations, prior to the removal of interest and tax costs.