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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.

answer is

B)Direct labor cost + factory overhead cost

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