The Reason for Combining Direct Labor and Overhead Costs Together

question 45

Multiple Choice

The reason for combining direct labor and overhead costs together and calling them "conversion costs" is that

• A)they both are direct costs of production.
• B)the equivalent unit amount for direct materials will be the same as that for direct labor and overhead costs.
• C)both these types of costs usually are incurred uniformly throughout the production process.
• D)the costs for direct labor and overhead are not accounted for separately.

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