Answer:
A) Yes Yes
Explanation:
The prime cost is the cost that includes both the direct material cost and the direct labor cost
In mathematically,
Prime cost = Direct material cost + Direct labor cost
While the conversion cost is the cost that includes the direct labor cost and the manufacturing overhead cost
In mathematically,
Conversion cost = Direct labor cost + Manufacturing overhead cost
Direct labor cost is classified as: Conversion cost Prime Cost : A) Yes Yes
The conversion cost is the cost that includes the direct labor cost and the manufacturing overhead cost.
They are cost incurred by the organization to convert the raw material into finished goods and this includes direct labor and manufacturing costs.
The prime cost is the cost that includes both the direct material cost and the direct labor cost. It is the addition of Direct material cost and Direct labor cost.
They are cost that the company incurs to manufacture their products only and are attributable to production department.
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