Conversion Cost in Accounting: Definition & Examples


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Yips Treats had $10,000 in direct labor costs, $15,000 in indirect labor costs, and $45,000 for all manufacturing overhead costs for the month of December. What were Yips' conversion costs?

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1. Conversion costs are _____ combined with manufacturing overhead costs.

2. Which of the following is not something included in manufacturing overhead costs?

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About This Quiz & Worksheet

Use this worksheet and quiz to find out how much you know about conversion cost in accounting. Topics on the quiz include conversion cost calculating and assessing what combines with manufacturing overhead costs.

Quiz & Worksheet Goals

These tools will guide you to:

  • Identify what is included in manufacturing overhead costs
  • Assess when conversion costs are useful
  • Find the conversion cost per unit in a given scenario

Skills Practiced

Practice the following:

  • Making connections - use understanding of the concept of manufacturing overhead costs and how it is connected to conversion cost
  • Problem solving - use acquired knowledge to solve conversion cost in accounting practice problems
  • Information recall - access the knowledge you've gained regarding when conversion costs are useful

Additional Learning

Find out more about this subject via the lesson called Conversion Cost in Accounting: Definition & Examples. Once you've finished the lesson, you will have covered the following study objectives:

  • Define conversion costs in accounting
  • Explain manufacturing overhead costs
  • Understand production costs
  • Identify the costs of indirect labor
  • Recognize how to find conversion costs