Asked by Chhor Sotheanea on May 07, 2024
Verified
What term refers to the cost of changing direct materials into a finished manufactured product?
A) factory overhead cost
B) period cost
C) conversion cost
D) direct labor cost
Finished Manufactured Product
Items that have completed the manufacturing process and are ready for sale.
Conversion Cost
Costs incurred during the transformation of raw materials into finished goods, specifically focusing on direct labor and manufacturing overhead expenses.
Direct Materials
Direct materials refer to the raw materials and components that are directly used in the manufacturing of a product, often considered a variable cost.
- Discern between prime and conversion costs in the realm of manufacturing.
Verified Answer
JK
Jessica KaiserMay 07, 2024
Final Answer :
C
Explanation :
Conversion cost refers to the cost of converting direct materials into a finished manufactured product. This includes direct labor cost and factory overhead cost. Period cost refers to expenses that are not directly related to the manufacturing process, such as selling and administrative expenses.
Learning Objectives
- Discern between prime and conversion costs in the realm of manufacturing.