Question

13. Which of the following is not a component of prime cost?
(a) Direct materials
(b) Direct labour.
(c) Direct expenses
(d) Overhead
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Answer 1

overhead will right answer because it's an indirect expense

Answer 2

Overhead cost is not the component of prime cost.

Explanation:-

• The term "prime cost" refers to a production cost that only includes direct costs, such as the cost of raw materials, direct labour, and direct expenses, but excludes factory overheads.
• Direct materials, direct labour, and direct costs are linked to the product cost and designated to a single product.
• Factory Overheads are costs not directly related to the product and cannot be assigned to it.