COST ACCOUNTING
MANUFACTURING OVERHEAD
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Materials only
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Labour only
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Both materials and labour
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Materials, labour and overheads
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Detailed explanation-1: -A prime cost is the total direct costs of production, including raw materials and labor. Indirect costs, such as utilities, manager salaries, and delivery costs, are not included in prime costs. The prime cost equation is equal to the cost of raw materials plus direct labor.
Detailed explanation-2: -Prime costs are the combination of the two direct product costs: direct materials costs and direct labor costs.
Detailed explanation-3: -Explanation: Direct Labor is both a prime cost and a conversion cost.
Detailed explanation-4: -The three general categories of costs included in manufacturing processes are direct materials, direct labor, and overhead.
Detailed explanation-5: -1. Prime cost: This comprises direct material, direct wages, and direct expenses.