In computing the cost to manufacture a product, the total prime cost will always be
A) greater than the conversion cost.
B) less than the conversion cost.
C) less than the product cost.
D) greater than the product cost.

Question

Quizplus · Accepted Answer

Prime cost is the sum of direct materials and direct labor, while product cost includes prime cost plus manufacturing overhead. Therefore, prime cost is always less than the total product cost.

In Computing the Cost to Manufacture a Product, the Total