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JAMB Principles of Accounts 2010 Question 29

Question 29

Manufacturing Accounts

The prime cost is the total of the

  1. A.production cost + selling expenses
  2. B.direct material + direct labour + direct expenses
  3. C.direct materials + work overhead expenses
  4. D.administrative expenses + selling + distribution expenses.
Show the answer and explanation

Answer: B (direct material + direct labour + direct expenses)

Explanation

Prime cost is all the direct costs: direct materials, direct labour and direct expenses.