Asked by Hannah Austin on May 07, 2024
Verified
Prime costs consist of factory overhead and direct labor.
Prime Costs
The combined costs of direct materials and direct labor that are directly involved in the production of a product.
Factory Overhead
Costs related to the manufacturing process that are not directly attributable to the product being manufactured, such as utilities and maintenance of equipment.
- Understand the constituents and calculations pertinent to prime and conversion costs.
Verified Answer
SS
Sanket SheladiyaMay 14, 2024
Final Answer :
False
Explanation :
Prime costs consist of direct materials and direct labor, not factory overhead. Factory overhead is part of the manufacturing overhead costs.
Learning Objectives
- Understand the constituents and calculations pertinent to prime and conversion costs.