Question

The Prime cost is comprises of

• A. All indirect cost
• B. All direct cost
• C. Direct and indirect cost
• D. Specific costs

Hint:

Prime cost helps in determining the basic cost of producing a product before adding overheads.

Answer 1

The Correct Option is B

Prime cost refers to all direct costs involved in the production of goods. This includes direct materials and direct labor, but excludes overheads. Prime cost is used to measure the core cost of production before accounting for indirect costs.