Prime Costs Consist of

question 50

Multiple Choice

Prime costs consist of

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

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Definitions:

Machine-Hours

A measure of the total hours machines are operated during the production of goods.

Direct Labor-Hours

The total hours worked by employees who are directly involved in the production process, used for calculating labor costs and efficiency.

Plantwide Predetermined Overhead

An overhead rate calculated for an entire manufacturing plant, applied to all products regardless of the specific department in which they were produced.

Machine-Hours

A measure of production activity that quantifies the number of hours machines are operated in the manufacturing process.