which of the following is a component of prime cost?
Answer Details
The component of prime cost is the cost directly related to the production of goods or services. The prime cost consists of the direct cost of materials, labor cost, and other direct expenses incurred in the production process. Depreciation, royalty, and factory rent are not part of prime cost since they are indirect expenses. However, factory electricity is part of prime cost since it is a direct expense that is directly related to the production process.