13RQ
Question
What are prime costs? Conversion costs?
Step-by-Step Solution
Verified Answer
Prime cost is the combination of direct cost and conversion cost is the combination of direct labor and manufacturing overhead.
1Definition of conversion cost
The conversion costs are defined as the combination of direct labor with the manufacturing overhead. These costs are basically the cost that converts the direct material into the finished products.
2Definition of conversion cost
The conversion costs are defined as the combination of direct labor with the manufacturing overhead. These costs are basically the cost that converts the direct material into the finished products
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