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Hi,
I am facing an exercise where they ask to measure the T.A.R.
In the answer I found out that marketing and admin costs are not included in the conversion cost.
Is there any reason as to why variable and fixed overheads are accounted as conversion cost whilst marketing and administrative costs are not?Thank you
SP
Because marketing and admin are not production costs related to the individual processes.
Conversion costs are the costs of converting raw material into finished goods.
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