Prime costs are:
A)The sum of materials and labor costs.
B)The sum of labor and manufacturing overhead.
C)The sum of fixed and variable overhead costs.
D)The sum of material, labor, and overhead costs.

Question

Quizplus · Accepted Answer

Prime costs are the direct costs of producing a product and include the cost of materials and labor. Manufacturing overhead is not included in prime costs. Fixed and variable overhead costs are part of the total overhead costs, which are not included in prime costs.

Prime Costs Are