Which of the following best describes prime cost?
a) Total manufacturing cost minus factory overhead
b) The sum of direct materials, direct labor and factory overhead
c) The sum of direct materials and indirect labor
d) Total manufacturing cost minus direct materials
anyone pleas help me to choose the correct option
Answers
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Answer:
TThe sum of direct materials, direct labor and factory overhead is the answer
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Answer:
A. Total manufacturing cost minus factory overhead
Explanation:
Prime Cost = Direct Materials & Direct Labor
Conversion Cost = Direct Labor & Manufacturing Overhead
TMC = DL + DM + MOH/FOH
PC = TMC - MOH/FOH
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