Asked by Carzetta Allen on May 04, 2024
Verified
Prime costs are the combination of direct labor costs and factory overhead costs.
Prime Costs
Direct materials and direct labor costs that are directly associated with the production of goods.
Factory Overhead Costs
Expenses related to operating a factory that cannot be directly traced to specific units produced, such as electricity, maintenance, and rent of the factory space.
Direct Labor Costs
Costs that are directly associated with the production of goods or services, typically wages paid to workers directly involved in manufacturing or production.
- Determine the constituents of product pricing and grasp the makeup of both prime and conversion costs.
Verified Answer
KV
Kenneth VillacarlosMay 11, 2024
Final Answer :
False
Explanation :
Prime costs are the combination of direct materials and direct labor costs, not including factory overhead costs.
Learning Objectives
- Determine the constituents of product pricing and grasp the makeup of both prime and conversion costs.