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:

Fixed Manufacturing Overhead

Costs that do not vary with the level of production, such as rent, salaries, and insurance associated with manufacturing.

Variances

Differences between expected and actual performance in business metrics such as costs, revenues, and production levels.

Direct Labor-Hours

The total hours worked by employees directly involved in manufacturing goods or providing services.

Standard Costs

Pre-determined costs used as a benchmark for evaluating actual production costs within a business.