Answer:
OPTION D: Direct Labor and Direct Material
Explanation:
Prime cost of a product is defined as the direct costs of producing a product including direct material costs and direct labor costs. Any other manufacturing overheads, indirect expenses and indirect materials/labor cost are not included in the calculation of PRIME COSTS .
Prime Cost = Direct Material Cost + Direct Labor Cost
Therefore, OPTION D: direct Labor and direct materials is the correct definition of prime costs.
