The cost that are directly traceable to the the goods being produced is?
Answer Details
The cost that is directly traceable to the goods being produced is called prime cost. This includes all the direct costs of production such as raw materials, direct labor, and other direct expenses that are directly related to the production process. Prime cost excludes indirect expenses such as rent, utilities, and other overhead costs that are not directly related to production. By calculating the prime cost, a company can determine the actual cost of producing a unit of its product, which can then be used to set appropriate pricing strategies and maximize profits.