Conversion Costs Consist of

question 165

Multiple Choice

Conversion costs consist of

• A) direct materials and direct labor.
• B) direct labor and overhead.
• C) direct materials and overhead.
• D) direct labor and indirect labor.

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Definitions:

Clearance Sale

A sale event to clear out inventory, often featuring significant reductions in prices to encourage quick sales.

Cost Price

The total cost incurred to produce or purchase an item before any markup or selling expenses are added.

Operating Expense

Expenditures that a business incurs through its normal business operations.

Operating Profit

Earnings before interest and taxes (EBIT), representing the profit a business makes from its operations.