Direct material costs plus direct labour costs are known as:

Question

Quizplus · Accepted Answer

Direct material costs and direct labour costs are the two main costs associated with the production of goods. When added together, they are known as prime costs. Choice B, fixed costs, are costs that do not vary with changes in production levels. Choice C, period costs, are costs that are not directly related to production, such as marketing expenses or administrative salaries. Choice D, conversion costs, include both direct labour costs and manufacturing overhead costs, such as equipment depreciation or utilities.

Direct Material Costs Plus Direct Labour Costs Are Known As