Which of the following costs is classified as a prime cost?
A)Option A
B)Option B
C)Option C
D)Option D

Question

Which of the following costs is classified as a prime cost? 
A)Option A 
B)Option B 
C)Option C 
D)Option D

Quizplus · Accepted Answer

Prime costs consist of direct materials and direct labor, which are both included in Option C. Option A includes indirect materials, which are not a prime cost, and Option B includes rent, which is not a manufacturing cost at all. Option D includes depreciation, which is not a prime cost either.

Which of the Following Costs Is Classified as a Prime