Prime cost consists of direct materials and what?
A) Direct labour.
B) Manufacturing overhead.
C) Indirect materials.
D) Cost of goods manufactured.

Question

Quizplus · Accepted Answer

Prime cost is the sum of direct materials and direct labor cost. Manufacturing overhead and indirect materials are not included in the calculation of prime cost. The cost of goods manufactured is the total cost of producing finished goods, which includes both prime cost and manufacturing overhead.

Prime Cost Consists of Direct Materials and What