COST ACCOUNTING
MANUFACTURING OVERHEAD
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Raw materials costs + direct labour costs
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Direct labour costs + Indirect labour costs
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Factory overheads + administrative costs
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Selling and distribution costs + administrative costs
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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 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.
Detailed explanation-3: -Explanation: Prime Cost: It consists of the costs of direct materials that go into the product, the costs of direct labor and direct expenses. It is also known as direct cost or first cost.
Detailed explanation-4: -prime cost in British English noun. the portion of the cost of a commodity that varies directly with the amount of it produced, principally comprising materials and labour. Also called: variable cost.