Which cost component represents direct materials plus direct labor in manufacturing cost accounting?
AConversion Cost
BSunk Cost
CPeriod Cost
DPrime Cost
Explanation
* Prime Cost = Direct Materials + Direct Labor.
* Conversion Cost = Direct Labor + Manufacturing Overhead (costs required to convert raw materials into finished goods).
* Direct labor is part of both Prime Cost and Conversion Cost.
Exam Relevance
- Topic: Cost Accounting
- Subtopic: Cost Concepts & Classifications
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