Prime costs consist of
A) direct materials and overhead.
B) direct labor and overhead.
C) direct labor and indirect labor.
D) direct materials and direct labor.

Question

Quizplus · Accepted Answer

Prime costs are the direct costs of production and includes direct materials and direct labor. Overhead costs are not considered as a part of prime costs. Thus, option D - direct materials and direct labor - is the most appropriate choice.

Prime Costs Consist of