which of the following costs is classified as a prime cost?\na) direct materials\nb) neither direct nor…

which of the following costs is classified as a prime cost?\na) direct materials\nb) neither direct nor indirect materials\nc) both direct and indirect materials\nd) indirect materials

which of the following costs is classified as a prime cost?\na) direct materials\nb) neither direct nor indirect materials\nc) both direct and indirect materials\nd) indirect materials

Answer

Brief Explanations:

Prime cost is the sum of direct materials and direct labor costs. Direct materials are directly traceable to the product. Indirect materials are part of manufacturing overhead, not prime cost. Option B is incorrect as direct materials are part of prime cost. Option C is wrong because indirect materials aren't in prime cost. Option D is incorrect as indirect materials are not prime cost.

Answer:

A. Direct materials