Final answer:
The cost classified as part of both prime costs and conversion costs is direct labor, as it is directly associated with production and also involved in converting raw materials into finished products. Option b is the correct answer.
Step-by-step explanation:
The question pertains to the categorization of various types of costs in the context of manufacturing. The concept of prime costs and conversion costs is fundamental in cost accounting, which is a critical knowledge area for professions in accounting and management.
Prime costs are the costs directly associated with the production of goods and typically include direct materials and direct labor. Conversion costs, on the other hand, are the costs incurred to convert raw materials into finished products, which include direct labor and manufacturing overhead.
Upon examining the options provided: a) indirect labor, b) direct labor, c) indirect materials, d) direct materials, the cost that is classified as part of both prime costs and conversion costs is direct labor. This is because direct labor is directly involved in the creation of the goods (prime costs) and is also a part of the transformation process from raw materials into finished goods (conversion costs).