WAEC - Accounts Principles Of Accounts (2016 - No. 22)

Which of the following expenses constitutes prime cost?
I. Direct labour cost II. Factory overheads III. Hiring of machine for production IV. Warehouse rent

I and II only

I and III only

I, II and III only

I,II and IV only

Explanation

Prime costs consist of direct materials and direct labor. Direct materials include all tangible components of a product. For example, direct materials include raw materials, supplies, and any other component that becomes part of the finished product.

WAEC - Accounts Principles Of Accounts (2016 - No. 22)

Explanation

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