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Conversion costs is _?

A) Direct material cost + direct labor cost.

B) Direct labor cost +  factory overhead cost.

C) Direct material cost + factory overhead cost.

D) Direct material cost + direct labor cost + factory overhead cost.

E) All

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Question added by Ahmed Abdi Mahad , Director of Internal Auditing Directorate , Jigjiga University
Date Posted: 2015/04/29
Mohammad Athar
by Mohammad Athar , Senior Accountant , Techno

B is the correct answer. Easier way to remember is that these are costs necessary to convert the raw material into finished goods.

Deleted user
by Deleted user

answer is

B)Direct labor cost + factory overhead cost