Answer:
Material cost + Labor cost are called ‘Prime Costs’
Labor cost + Overhead cost are called ‘Conversion Costs’
Step-by-step explanation:
Prime cost is defined as material cost+Labor cost. All the material costs and labour costs are included in the definition of the prime cost.
Conversion cost is defined as Labor cost+ overhead cost. All the costs related to labor and overhead are included in the definition of Conversion cost.