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Conversion costs are comprised of a.direct labor and selling expenses. b.direct labor and factory overhead. c.factory overhead and direct materials. d.direct labor and direct materials.

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Answer:

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

Explanation:

Conversion costs are those expenditures as a result of converting raw materials into final goods. Thus, conversion costs imply considering the direct labor costs and the manufacturing overhead costs. Besides, costs of power service and other utilities needed for the production service fall into this category.

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