As production becomes more automated,direct labor may be viewed more as a conversion cost than as a prime cost.

Question

Quizplus · Accepted Answer

Direct labor is considered a prime cost because it is directly involved in the production of a good or service. However, as automation increases, the cost of direct labor may become less significant in comparison to other costs such as machinery and equipment. In this case, direct labor may be viewed more as a conversion cost, which includes any cost related to the transformation of raw materials into finished goods. Therefore, the statement is true.

As Production Becomes More Automated,direct Labor May Be Viewed More