COST ACCOUNTING
INTRODUCTION TO COST ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Indirect materials + Indirect labour + Indirect expenses
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Total material + Total labour + Other expenses
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Total cost + selling costs + distribution costs
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Direct material + Direct labour + Direct expenses
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Detailed explanation-1: -A prime cost is the total direct costs of production, including raw materials and labor. Indirect costs, such as utilities, manager salaries, and delivery costs, are not included in prime costs. The prime cost equation is equal to the cost of raw materials plus direct labor.
Detailed explanation-2: -Prime cost is calculated by adding the cost of raw materials to the cost of labor directly associated with the production process. The formula is as follows: Prime Cost = Direct Expenses + Direct Wages.
Detailed explanation-3: -Prime cost = Direct raw materials + Direct labor Prime cost = Direct raw materials + Direct labor Prime cost=Direct raw materials+Direct labor Locate the total for the direct raw materials cost on the company’s balance sheet.
Detailed explanation-4: -Direct material: The cost of wood used to create the tables. Direct labor: The cost of wages and benefits for the carpenters to create the tables.
Detailed explanation-5: -Prime costs include direct material and direct labor costs. Conversion costs include direct labor and overhead expenses. Both are a metric used to determine the efficiency of production.