Direct material + direct expenses is

Assessment: WAEC SSCE - Financial Accounting - 2005 (Objective) Subject: Financial Accounting

Question 1 Report

Direct material + direct expenses is
Answer Details
Direct material refers to the cost of raw materials that are directly used in the production process. Direct expenses, on the other hand, are the expenses that are directly related to the production process such as direct labor, freight charges, etc. The sum of direct material and direct expenses gives us the prime cost of a product. Prime cost represents the cost of direct resources required to produce a product, excluding any overhead costs or indirect expenses. Hence, the correct option is 'prime cost.'
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