Prime Costs Are Comprised Of

question 39

Multiple Choice

Prime costs are comprised of:

• A) direct materials and manufacturing overhead.
• B) direct labor and manufacturing overhead.
• C) direct materials, direct labor, and manufacturing overhead.
• D) direct materials and direct labor.
• E) direct materials and indirect materials.

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Definitions:

Contribution To Revenue

The portion of sales revenue that is not consumed by variable costs and contributes to covering fixed costs.

Double-Declining-Balance

A method of accelerated depreciation where an asset's book value is reduced at double the rate of traditional straight-line depreciation.

Book Value

The net value of an asset, calculated as the original cost minus accumulated depreciation, depletion, or amortization.

Plant Asset

Long-term tangible asset that is used in the production process of a company, such as machinery, buildings, and equipment, contributing to the company's operations.