Prime Cost Is the Sum of Direct Materials Cost and Direct

question 342

True/False

Prime cost is the sum of direct materials cost and direct labor cost.

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Definitions:

Hedge Exposure

A risk management strategy used to reduce or mitigate the risk of adverse price movements in an asset, typically through the use of derivative instruments.

Transaction Exposure

The risk that the value of a company's foreign currency-denominated transactions will be adversely affected by exchange rate fluctuations.

Spot Rate

The existing market cost at which a specific asset is available for purchase or sale for instant delivery.

Forward Rate

The exchange rate specified in a forward exchange contract.