Prime Product Costs Include

question 34

Multiple Choice

Prime product costs include

• A)only factory overhead.
• B)only direct labour.
• C)direct labour and factory overhead.
• D)direct materials and direct labour.

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Definitions:

Variable Cost

Costs that change in proportion to the level of production or business activity, such as materials and labor.

Variable Cost

Costs that vary in direct proportion to changes in levels of production or business activity, such as materials and labor.

Fixed Cost

A cost that does not change with the volume of sales.

Fixed Costs

Expenses that do not change in proportion to the activity of a business, such as rent, salaries, and loan payments.