Prime cost and conversion cost share what common element of total cost?
A)Direct labor.
B)Direct materials.
C)Variable overhead.
D)Fixed overhead.

Question

Quizplus · Accepted Answer

Both prime cost and conversion cost include direct labor as a common element of total cost. Prime cost includes direct materials and direct labor, while conversion cost includes direct labor and manufacturing overhead. Therefore, direct labor is the only common element of total cost shared by both prime cost and conversion cost.

Prime Cost and Conversion Cost Share What Common Element of Total