Prime Cost Consists of Direct Materials Combined With

question 70

Multiple Choice

Prime cost consists of direct materials combined with:

• A) direct labor.
• B) manufacturing overhead.
• C) indirect materials.
• D) cost of goods manufactured.

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Definitions:

Opportunity Costs

The expense of the best alternative given up to make a choice.

Factors Of Production

The resources used to produce goods and services. Labor and capital are examples of factors.

Increasing Opportunity Cost

Increasing opportunity cost implies that producing more of one good requires giving up an increasing amount of production of another good, reflecting resource specialization.

Consumer Goods

Products and services that are purchased for personal use or consumption.