Asked by Samantha Batchelder on May 05, 2024
Verified
Which of the following costs incurred by a paper manufacturer would be included in the group of costs referred to as conversion costs?
A) machine operator's wages.
B) sales person salaries.
C) lumber.
D) advertising costs.
Conversion Costs
Costs incurred to convert raw materials into finished products, typically including direct labor and manufacturing overhead.
Machine Operator's Wages
The compensation paid to workers who operate machinery, typically categorized as direct labor costs in manufacturing.
- Identify the components of conversion costs in a manufacturing setting.
Verified Answer
MA
michael ayalaMay 09, 2024
Final Answer :
A
Explanation :
Conversion costs are the costs incurred to convert raw materials into a finished product, and include direct labor and manufacturing overhead costs such as machine operator's wages. Sales person's salaries, lumber, and advertising costs are not considered conversion costs as they do not directly relate to the manufacturing process.
Learning Objectives
- Identify the components of conversion costs in a manufacturing setting.
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