The workers who sweep the factory floor are a part of prime cost, but not conversion cost.
TRUE OR FALSE
Note: Please give an explanation whether it's TRUE or FALSE. I would appreciate if very much.
The Given Statement is false
Prime cost includes Direct Material & Direct Labor cost. Direct Labor means the labor cost which exclusively relates to the production
Conversion Cost is the cost which is relates to transforming the raw material to finished goods, it includes both labor cost & overhead cost
Since sweep cost is relates to overheads it will be included in conversion cost but not in prime cost
Hence the given statement is false.
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