Conversion cost consists of which of the following

A) Direct materials and direct labour costs.
B) Direct labour and manufacturing overhead costs.
C) Direct labour cost.
D) Manufacturing overhead cost.

Conversion Cost

Refers to expenses incurred in the process of transforming raw materials into finished goods, encompassing both labor and overhead costs in manufacturing.

Direct Labour

The workforce engaged in the hands-on manufacturing or processing of products, whose costs are directly assigned to the production cost.

Manufacturing Overhead

All indirect costs associated with the production process, including utilities, maintenance, and factory management expenses, not directly tied to specific units produced.