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:

Profit-maximizing

The process of adjusting production and sales to achieve the highest possible profit.

Market Wage

The prevailing rate of pay for a specific job in a particular labor market.

Productivity

An indicator of how effectively resources are used in production, typically expressed as the proportion of produced goods to the resources consumed.

Competitive Industry

A competitive industry is one where numerous firms compete against each other to sell similar goods or services, often leading to innovation and lower prices for consumers.