Final answer:
None of the provided options contains exclusively conversion costs. Conversion costs include direct labor and manufacturing overhead, which are related to converting raw materials into finished goods, while none of the options listed provide this combination without including other non-conversion costs.
Step-by-step explanation:
The question is asking which list of costs consists exclusively of conversion costs in the context of an inflatable raft manufacturing corporation. Conversion costs are the costs that are incurred to convert raw materials into finished goods.
Direct labor and manufacturing overhead are both considered conversion costs because they are directly related to the transformation process of production. Direct labor refers to the wages of the employees who are actually making the goods, while manufacturing overhead includes a variety of indirect costs such as factory utilities, depreciation on equipment, and maintenance among others that are also necessary for production. Therefore, direct materials, which are the raw materials used to produce goods, are not part of conversion costs.
The correct answer to which list contains only conversion costs for an inflatable raft manufacturing corporation is:
- Direct labor
- Manufacturing overhead
- Selling expenses (Incorrect, not part of conversion costs)
The presence of 'selling expenses' in option (c) makes this option incorrect. Selling expenses are not part of conversion costs; they are incurred once the product is finished and are related to the selling and distribution process.
Thus, options (a), (b), and (d) also contain elements that are not conversion costs (i.e., direct materials, selling expenses, administrative expenses). The question appears to have a typographical or content error as none of the options provided exclusively list conversion costs (direct labor, manufacturing overhead).