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i. Direct materials ii.Direct labour iii.Direct expenses iv. Factory expenses Prime cost consist of

Accounts - Principles of Accounts
JAMB 2013

i. Direct materials
ii.Direct labour
iii.Direct expenses
iv. Factory expenses

Prime cost consist of

  • A. i, ii and iii
  • B. i, ii and iv
  • C. i, iii and iv
  • D. ii, iii and iv
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Correct Answer: Option A
Explanation

Prime cost is the direct cost of a commodity in terms of the materials and labour involved in its production, excluding fixed costs. Direct material and direct labor costs are prime cost because they are the main incremental costs of a product.


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Post-UTME Past Questions - Original materials are available here - Download PDF for your school of choice + 1 year SMS alerts
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