In cost terms, the direct manufacturing labor cost is included in ___________?
Correct answer: D. both B and C
- A. manufacturing costs
- B. prime costs
- C. conversion costs
- D. both B and C
Explanation
Direct labor forms part of prime cost with direct materials and part of conversion cost with manufacturing overhead. Therefore, both prime costs and conversion costs include direct manufacturing labor.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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