The salary paid to the production manager in a factory is:
A)a variable cost.
B)part of prime cost.
C)part of conversion cost.
D)both a variable cost and a prime cost.

Question

Quizplus · Accepted Answer

The production manager's salary is a part of conversion cost, along with other expenses related to the conversion of raw materials into finished goods, such as direct labor and factory overhead. It is not a variable cost as it does not vary with the level of production. It is also not a part of prime cost, which includes only direct materials and direct labor.

The Salary Paid to the Production Manager in a Factory