The term "prime cost" refers to:
A)The sum of direct labor costs and all factory overhead costs.
B)The sum of direct material costs and direct labor costs.
C)All costs associated with manufacturing other than direct labor costs and direct material costs.
D)Manufacturing costs incurred to produce units of output.

Question

Quizplus · Accepted Answer

Prime cost is the sum of direct material costs and direct labor costs. This does not include any overhead costs associated with manufacturing.

The Term "Prime Cost" Refers To