Which of the following is no part of prime cost of production?
Answer Details
Depreciation of factory equipment is not a part of the prime cost of production.
Prime cost is the sum of all direct costs involved in the production of goods or services, which includes the cost of raw materials, direct expenses, direct wages, and any other expenses that are directly attributable to the production process.
Depreciation, on the other hand, is a non-cash expense that reflects the gradual decrease in value of the factory equipment over its useful life. It is considered an indirect cost because it does not directly contribute to the production process.
Therefore, depreciation of factory equipment is not included in the calculation of prime cost.