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31 January, 20:14

The two categories of cost comprising conversion costs are

a. direct labor and indirect labor

b. direct labor and factory overhead

c. factory overhead and direct materials

d. direct labor and direct materials

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Answers (1)
  1. 31 January, 20:36
    0
    b. direct labor and factory overhead

    Explanation:

    The conversion cost is that convert which is used to convert the raw material to the finished goods inventory. It is a combination of the direct labor cost and the factory overhead or manufacture overhead cost.

    It can be fixed or variable marinating costs only. It does not include direct material cost

    It is computed by taking a difference of production cost and raw material cost

    Hence option b is correct
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