Asked by Isaiah Drayton on Jun 22, 2024
Verified
Conversion costs include materials, direct labor, and factory overhead.
Conversion Costs
The combination of direct labor and factory overhead costs.
Direct Labor
The workforce directly involved in manufacturing or producing goods, whose wages are considered a variable cost.
Factory Overhead
All indirect costs associated with operating a factory, excluding direct materials and direct labor costs.
- Understand the role and calculation of conversion costs within process costing.
Verified Answer
LD
Lacie DraperJun 26, 2024
Final Answer :
False
Explanation :
Conversion costs include direct labor and factory overhead, but not materials. Materials are considered part of the production cost.
Learning Objectives
- Understand the role and calculation of conversion costs within process costing.
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