Asked by Nicole Guerrero on May 28, 2024
Verified
Prime cost consists of:
A) direct labor and manufacturing overhead.
B) direct materials and manufacturing overhead.
C) direct materials and direct labor.
D) direct materials, direct labor and manufacturing overhead.
Prime Cost
The sum of direct materials and direct labor costs associated with the production of goods.
Manufacturing Overhead
Indirect costs associated with manufacturing, such as utilities, maintenance, and factory equipment depreciation, not directly tied to specific units of product.
- Comprehend the elements of prime and conversion expenses in the calculation of product costs.
Verified Answer
SS
Sukhraj SinghMay 29, 2024
Final Answer :
C
Explanation :
Prime cost consists of direct materials and direct labor, which are the direct costs associated with the production of goods. Manufacturing overhead is not included in prime cost.
Learning Objectives
- Comprehend the elements of prime and conversion expenses in the calculation of product costs.