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Direct labor cost is a part of:

Conversion cost      Prime cost

A) No                                  No

B) No                                Yes

C) Yes                              Yes

D) Yes                                No

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Question added by Mohammed Mohammed , Senior SAP Consultant , Abyat Mega Store
Date Posted: 2015/02/01
Upvote (6) Views (14) Followers (20) Answers (18) Report Question
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Muhammad Sarmad Akram
by Muhammad Sarmad Akram , Accounts Administration Manager , Best All Traders

Its C direct labour fall both in conversion cost and prime cost

islam ahmed
by islam ahmed , Regional Accounting Manager , EJADA

 Prime cost= D.L+D.M

Conversion cost= D.L + FOH

so its (C)

FITAH MOHAMED
by FITAH MOHAMED , Financial Manager , FUEL AND ENERGY CO for transportion petroleum materials

Conversion cost      Prime cost

B) No                                Yes

 

Lesley Lanag CMA CPA
by Lesley Lanag CMA CPA , Senior Accountant , Takaful Emarat Insurance (P.S.C)

C. Conversion cost and prime cost.

Hasan Tariq
by Hasan Tariq , Assistant Finance manager , Elahi Group of Companies

C, because Direct material cost and Direct labor cost makes conversion cost. and If FOH is added in the said2 costs then they will  make prime cost

Fawzy Ahmed Salim El-Shabiby
by Fawzy Ahmed Salim El-Shabiby , Accountant , Servtel Information, Security, and Telecommunication Network Limited

Answer: (c) conversion cost & Prime cost

Mir Mujtaba Ali
by Mir Mujtaba Ali , Internal Audit Manager , Confidential

I would opt

C) Yes                              Yes

AZHAR NAWAZ
by AZHAR NAWAZ , Assistant Manager Accounts , Quantum Geoservices (Pvt) Ltd

Labor cost is part of Conversion Cost and also Prime Cost (Option C is Correct)

SOEB MANSURI
by SOEB MANSURI , Senior Internal Auditor , R Holding

Direct labor cost is a component of prime cost with direct material cost and a component of conversion cost with manufacturing overhead . 

mohamed Hakim CMA CPA Candidate
by mohamed Hakim CMA CPA Candidate , Accounting Manager , Andersen saudi arabia

Answer B 

NO conversion , yes prime cost

Imran Ahmed Mirza
by Imran Ahmed Mirza , Accounts Supervisor , Value Added Services Corp. client at Jang Group of Newspapers

Direct labor cost is the part of both Conversion and Prime Cost.

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