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TiliK225 [7]
3 years ago
6

LO 2.2Which of the following are prime costs?

Business
1 answer:
sesenic [268]3 years ago
4 0

Answer:

OPTION D: Direct Labor and Direct Material

Explanation:

Prime cost of a product is defined as the direct costs of producing a product including direct material costs and direct labor costs. Any other manufacturing overheads, indirect expenses and indirect materials/labor cost are not included in the calculation of PRIME COSTS .

                 Prime Cost = Direct Material Cost + Direct Labor Cost

Therefore, OPTION D: direct Labor and direct materials is the correct definition of prime costs.

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