[amp_mcq option1=”transaction costs” option2=”conversion costs” option3=”resale costs” option4=”merchandise costs” correct=”option2″]<\/p>\n
The correct answer is B. conversion costs.<\/p>\n
Conversion costs are the costs of converting raw materials into finished goods. They include direct labor costs and manufacturing overhead costs. Direct labor costs are the costs of labor that is directly involved in the manufacturing process. Manufacturing overhead costs are the costs of production that are not directly involved in the manufacturing process, such as indirect labor, indirect materials, and factory overhead.<\/p>\n
Transaction costs are the costs of making a sale or purchase. They include costs such as sales commissions, shipping costs, and credit card fees. Resale costs are the costs of selling goods that have already been manufactured. They include costs such as marketing costs, sales commissions, and customer service costs. Merchandise costs are the costs of goods that are purchased for resale. They include the cost of the goods themselves, as well as the costs of transportation, storage, and insurance.<\/p>\n
In conclusion, direct manufacturing labor costs are added into manufacturing overhead cost to calculate conversion costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
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