Which of the following costs are conversion costs? a. factory overhead cost b. direct materials cost and direct labor cost c. direct labor cost and factory overhead cost d. direct materials cost and factory overhead cost

The correct answer is letter "C": direct labor cost and factory overhead cost.

Explanation:

Conversion costs include direct labor referred to salary, wages or benefits paid to workers because of the completion of a product, and factory overhead which are all those expenses necessary for the production of goods but are untraceable such as the power service or rent.

income statement is prepared in order to show the profits and loss of a business. in order to prepare the income statement she should collect all the income and expenses of the product with the cost of production.