Prime costs are defined as:
A)manufacturing costs plus non-manufacturing costs.
B)direct labor plus direct materials.
C)variable costs equal fixed costs.
D)manufacturing overhead plus direct labor.

Question

Quizplus · Accepted Answer

Prime costs refer to the direct costs associated with the production of goods or services, which include the cost of direct materials and direct labor. Manufacturing overhead is not included in prime costs, as it is an indirect cost. Non-manufacturing costs and fixed costs are also not included in prime costs.

Prime Costs Are Defined As