Which of the following is not a prime cost? O Supervisor's wages Direct labor wages Assembly line wages O Machine operator wages

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Which of the following is not a prime cost?
Supervisor's wages
O Direct labor wages
O Assembly line wages
Machine operator wages
Transcribed Image Text:Which of the following is not a prime cost? Supervisor's wages O Direct labor wages O Assembly line wages Machine operator wages
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Prime costs is a company’s expenses which is directly related to the production process like  the materials and labor expenses. It refers to a manufactured product's costs. The total Cost for production is differentiated into various parts so that the company can get a clear view of its expenses and ensure best profit margin. The prime cost includes the direct costs of raw materials and labor that are involved in the production of the company’s goods and services. Direct costs do not include indirect expenses, such as advertising and administrative costs.

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