Prime cost is one of the following
-
A.
expenses which can be identified with an allocated to cost centers -
B.
aggregate direct material cost, direct labour cost and variable direct expenses -
C.
the cost taken into account in the production process whether direct or indirect -
D.
the cost of commodities supply to an undertaking
Correct Answer: Option B
Explanation
prime cost is the direct cost of a commodity in terms of the materials and labour involved in its production, excluding fixed costs.