Question

Prime cost is Group of answer choices direct labor cost and indirect labor cost. direct materials cost and direct labor cost. indirect materials cost and direct labor cost. direct materials cost and indirect labor cost.

Answer 1

Direct material cost and Direct labor cost.

Step-by-step explanation:

Manufacturing costs are divided into 2 groups;

1. Prime Cost.
2. Conversion Cost.

• Prime cost: It includes the costs which are directly related to the manufacturing of the product, i-e Direct material cost and direct labor cost. Direct material cost includes the costs related to the raw material of the product being manufactured. On the other hand, Direct labor cost includes the costs which are related to the labor working on the product, for example, the salary of the labor.