Prime costs are
A) direct materials and factory overhead
B) direct materials and direct labor
C) direct labor and factory overhead
D) period costs and factory overhead

Question

Quizplus · Accepted Answer

Prime costs are the direct costs of producing a good or service, which includes direct materials and direct labor. Factory overhead is considered an indirect cost and not included in prime costs. Period costs are also not included in prime costs, as they are not directly related to the production of goods or services.

Prime Costs Are