Asked Jan 9, 2020

Identify the following costs as a prime cost (P), conversion cost (C), or both (B) for a magazine publisher:
a. Paper used for the magazine
b. Wages of printing machine employees
c. Glue used to bind magazine
d. Maintenance on printing machines


Expert Answer

Step 1

Prime cost:

Prime cost refers to a cost which is directly involved in the process of manufacturing an item. Prime cost includes direct materials, direct labor and other direct overheads.

Conversion cost:

A convers...

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