Multiple choice

Prime cost is equal to:

  1. Variable cost plus administrative cost

  2. Variable cost plus fixed cost

  3. Variable cost only

  4. Fixed cost only
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Prime cost is defined as the direct costs of production, which includes direct materials and direct labor. In the context of the options provided, it is most closely associated with variable costs.

Keep practicing — related questions