1: Prime cost is defined as the total direct production cost of an item.

True

2: A Cost that consists an element of both fixed and variable cost is called as semi Varaible cost . True

3: Mateial used in production is not a fixed cost. True

4: Production Overheads are the costs that include , indirect labour, indirect material and indirect
expenses related to production activity. True

5: Direct Cost is the cost that can be economically traced with a specific cost unit. True.

6: Variable costs per unit are affected by changes in activity. False

7: period costs are expensed as incurred and will not be included in the work in process account. True

8: direct labor would be classified as part of both prime cost and conversion cost. True

9: Prime costs consist of direct labor and direct materials. True

10: Factory supplies in a manufacturing plant are most likely variable costs. True