For each item, choose all applicable cost labels. Use the codes below in your answer. More than one code may be applicable.
-Direct labour used
A) Prime Cost
B) Conversion Cost
C) Product Cost
D) Period Cost

Question

Quizplus · Accepted Answer

Direct labour used is considered a Prime Cost because it is directly associated with the production of goods. It is also a Conversion Cost as it is part of the costs required to convert raw materials into finished goods. Additionally, it is a Product Cost since it is a cost that is incurred to create a product. It is not a Period Cost, as Period Costs are not directly tied to production and are expensed in the period they are incurred.

For Each Item, Choose All Applicable Cost Labels