alleryStart learning →Costs of conversion include costs directly related to units, such as
Aselling commission
Bdirect labour cost
Cinterest on loans
Dstatutory audit fees
Answer & Solution
Correct answer: B. direct labour cost
Direct labour is directly related to production units and so forms part of the cost of conversion.
Keep practising Inventories
Browse all Inventories questions for CA Foundation, or explore more Accounting topics.
Related questions
Land held for resale by a dealer is classified asWhich items count as inventories held as materials or supplies?Stock on 5 April is 2,40,000; April 1-5 sales 50,000 at 25% on cost, purchases 15,000. StoWhich three heads make up the cost of inventories?The cost of inventories may be unrecoverable if stock isWhich inventory method most closely mimics the physical flow of goods?Opening stock 40,000; purchases 1,60,000; sales 2,00,000; gross profit 25% of sales. ClosiWhich system needs a physical count at year end to find cost of goods sold?