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a. Prime Cost
b. Conversion Cost
c. Both
To calculate the Prime Cost & Conversion Cost we use the Direct Labor
Prime Cost = Direct Material Cost + Direct Labor Cost
Conversion Cost = Direct Labor Cost +Manufacturing Overheads
answer option c) Both.
Direct labor is also known by name prime cost and Conversion cost.
C.Both is correct answer.
Direct labor is a Component of both prime cost and conversion cost.
The direct labor costs are both a prime cost and a conversion cost
when it was mixed with direct materials it represents prime cost
but when mixing with over head it represents convertion costs
answer is C both
a. Prime Cost .................................................................................................................
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