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Which of the following is not part of prime cost of production?

Accounts - Principles of Accounts
WAEC 2013

Which of the following is not part of prime cost of production?

  • A. depreciation of factory equipment
  • B. direct expenses
  • C. direct wages
  • D. carriage on raw materials
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Correct Answer: Option A
Explanation

 Prime costs are all of the costs that are directly attributed to the production of each product. Prime costs are direct costs, meaning they include the costs of direct materials and direct labor involved in manufacturing an item. Companies use prime costs to price their products.


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