Which of the following is TRUE concerning prime costs?
A)Prime costs are direct manufacturing costs.
B)They include indirect manufacturing labour.
C)They equal the sum of direct manufacturing costs plus conversion costs.
D)They equal the sum of fixed manufacturing costs plus conversion costs.
E)They are indirect manufacturing costs.

Question

Quizplus · Accepted Answer

Prime costs are defined as the direct costs of materials and labor that are directly involved in the production of a product or service. This excludes any indirect costs such as overhead or administrative expenses.

Which of the Following Is TRUE Concerning Prime Costs