Question

wages paid to a timekeeper in a factory is classified as a conversion cost or prime...

wages paid to a timekeeper in a factory is classified as a conversion cost or prime cost, kindly explain your answer

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Answer #1

Answer)

Wages paid to a timekeeper in a factory can be classified as coversion cost but not as a prime cost.

Uptomy knowledge prime cost includes only direct labour where as timekeeper may be considered as indirect labour as he doesn't directly participate in manufacturing process.In conversion costs all costs of manufacturer included except raw materials cost.Probably,A timekeeper wages comes under factory overhead and conversion cost includes direct labour cost and manufacturing or factory overhead.

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