Prime costs consist of:
A) Direct Labour and Manufacturing Overhead.
B) Direct Material and Direct Labour.
C) Direct Material and Manufacturing overhead.
D) Direct Material, Direct Labour and Manufacturing Overhead.

Question

Quizplus · Accepted Answer

Prime costs are the direct costs that are directly related to the production of goods. These costs include direct materials and direct labor, which are essential for creating the finished product. Manufacturing overhead is not included in prime costs, as it represents indirect costs that cannot be directly traced to the creation of a single product or service.

Prime Costs Consist Of