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LO 4.1Which of the following is a prime cost?

indirect materials
direct labor
administrative expenses
factory depreciation expenses

User Tiana
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1 Answer

5 votes

Answer:

option B

Step-by-step explanation:

Prime costs refers to the expenses of a company directly linked to the labor and materials used during manufacturing. This relates to the expense of a product made, which is measured to provide a business with the highest profit margin.

A prime cost is really the cumulative direct costs of producing a commodity for sale, which can be constant or adjustable. Companies utilize prime costs as more of a method of measuring the overall cost of the development materials required to create a specific output.

Thus, from the above we can conclude that the correct option is B .

User Sonicblis
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