Question 1.

(A) Which of the following is NOT a conversion cost?

i) Depreciation on headquarters office equipment

ii) Indirect labor costs

iii) Electricity used to run factory machinery

iv) Indirect material costs

(B) Which of the following companies would be most likely to use job-order costing?

i) A potato chip manufacturer

ii) A custom aircraft manufacturer

iii) A pharmaceutical manufacturer

iv) A dairy farm