Prime cost is one of the following

Assessment: JAMB UTME - Principles of Accounts - 2015 Subject: Financial Accounting

Question 1 Report

Prime cost is one of the following
Answer Details
Prime cost refers to the total cost of the direct materials, direct labor, and variable direct expenses that are directly involved in the production of a product or service. This means that prime cost includes the expenses incurred for the materials, labor, and other variable costs that are necessary to create the finished product or service. Prime cost excludes indirect costs such as overhead, rent, and administrative expenses. Therefore, the answer to this question is: aggregate direct material cost, direct labor cost, and variable direct expenses.
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