Identify the Following Costs as (A) Prime Cost, (B) Conversion

question 97

Short Answer

Identify the following costs as (a) prime cost, (b) conversion cost, or (c) both for a cake factory.
1. Frosting
2. Wages of the baker
3. Sprinkles for the topping (considered an indirect material)
4. Depreciation on oven

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Definitions:

Cheques

A written, dated, and signed instrument that contains an unconditional order directing a bank to pay a definite sum of money to a payee.

Deposit

A sum of money placed or kept in a bank account, often to gain interest.

Balance

Balance refers to the amount of money in a financial account, or the equality between the sum of debits and credits in an account.

Account

A record or statement of financial expenditure and receipts relating to a particular period or purpose or the contractual arrangement under which an entity manages the funds of another.