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WAEC Financial Accounting 2005 Question 33

Question 33

Manufacturing Accounts

Direct material + direct expenses is

  1. A.overhead
  2. B.prime cost
  3. C.total cost
  4. D.conversion cost.
Show the answer and explanation

Answer: B (prime cost)

Explanation

Direct costs together make up prime cost (the question leaves out direct labour, but prime cost is the closest option).