Which of the following statements correctly describes the term “conversion costs”?

Which of the following statements correctly describes the term conversion costs? the cost to convert finished goods to sales to customers the cost of direct materials, direct labor, and manufacturing overhead costs incurred during production the cost of direct labor combined with manufacturing overhead the cost incurred for direct and indirect materials during production

Which of the following statements correctly describes the term conversion costs? the cost to convert finished goods to sales to customers the cost of direct materials, direct labor, and manufacturing overhead costs incurred during production the cost of direct labor combined with manufacturing overhead the cost incurred for direct and indirect materials during production

Answer

The correct answer is C.

Conversion costs are the combination of direct labor costs plus
manufacturing overhead costs.

Conversion costs is the manufacturing or production costs
necessary to convert raw materials into products. Expressed another
way, conversion costs are a manufacturer's product or production
costs other than the costs of raw materials.