Asked by ZnonEmpire candy on Jul 07, 2024
Verified
Equivalent production units are generally determined for
A) direct materials and conversion costs
B) direct materials only
C) conversion costs only
D) direct materials and direct labor costs only
Direct Materials
Raw materials directly attributed to the production of goods.
Conversion Costs
Costs in manufacturing that include both direct labor and overhead costs, specifically associated with the conversion of raw materials into finished goods.
- Identify the differences between direct materials costs and conversion costs within the context of process costing.
Verified Answer
ZK
Zybrea KnightJul 08, 2024
Final Answer :
A
Explanation :
Equivalent production units are calculated for both direct materials and conversion costs to accurately measure the amount of work done on partially completed units at the end of an accounting period. Conversion costs include direct labor and manufacturing overhead, making them a key component alongside direct materials in determining equivalent units.
Learning Objectives
- Identify the differences between direct materials costs and conversion costs within the context of process costing.