'Prime costs' include:
A)only direct materials.
B)direct materials and manufacturing overhead costs.
C)direct materials and direct manufacturing labour costs.
D)direct manufacturing labour and manufacturing overhead costs.

Question

Quizplus · Accepted Answer

Prime costs refer to the costs that are directly involved in the production of a product, which includes direct materials and direct manufacturing labour costs. Manufacturing overhead costs are not included in prime costs as they are indirect costs.

'Prime Costs' Include