Direct labour costs plus prime costs equals manufacturing overhead costs.

Name: Direct labour costs plus prime costs equals manufacturing overhead costs.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Manufacturing overhead costs include indirect materials, indirect labour, and other expenses such as rent, utilities, and depreciation. Direct labour and prime costs only account for direct materials and direct labour used in production. Therefore, manufacturing overhead costs cannot be equal to direct labour costs plus prime costs.

Direct Labour Costs Plus Prime Costs Equals Manufacturing Overhead Costs