Question on: WAEC Accounting - 2016
Which of the following expenses constitutes prime cost?
I. Direct labour cost II. Factory overheads III. Hiring of machine for production IV. Warehouse rent
A
I and II only
B
I and III only
C
I, II and III only
D
I,II and IV only
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Correct Option: B
PrimeĀ costs consist of direct materials and direct labor. Direct materials include all tangible components of a product. ForĀ example, direct materials include raw materials, supplies, and any other component that becomes part of the finished product.
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