Which of the Following Is True Concerning Prime Costs

question 83

Multiple Choice

Which of the following is true concerning prime costs?

• A) Prime costs are direct manufacturing costs.
• B) They include indirect direct manufacturing labour.
• C) They equal the sum of direct manufacturing costs plus conversion costs.
• D) They equal the sum of fixed manufacturing costs plus conversion costs.
• E) They are indirect manufacturing costs.

---

Definitions:

Incentive

Something that motivates or encourages an individual or entity to act in a certain way.

Costs And Benefits

This is an analysis approach that compares the potential outcomes and implications, in terms of costs and benefits, of an action or decision.

Marginal Social Benefit

The extra advantage to society that comes from using an additional unit of a product or service.

Marginal Social Cost

The total cost to society of producing one additional unit of a good, including both private costs and externalities.