Which of the following would be classified as a prime cost?
A)Cost of raw materials
B)Depreciation on factory equipment
C)Salary of sales personnel
D)Depreciation on office furniture

Question

Quizplus · Accepted Answer

Prime costs are the costs directly associated with the production of goods or services, including the cost of raw materials and direct labor costs. Depreciation on factory equipment and office furniture are examples of indirect costs, while the salary of sales personnel is considered a selling expense.

Which of the Following Would Be Classified as a Prime