Answer:
Explanation:
Conversion cost is the cost that is required to convert the raw material into a product. It is a mix of direct labor costs and the manufacturing overhead cost. It is also known as production cost which is required to produce the product
In mathematically,
Conversion cost = Direct labor cost + manufacturing overhead cost
It excludes the direct material cost
These two costs are required to convert the raw material into the final product
The examples of conversion cost are indirect labor, repairs and maintenance charges,etc
