CAF-5 · Chapter 1 · Question 7 of 10
In a manufacturing account, how is "Prime Cost" calculated?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Cost of materials consumed + Direct labour + Other direct expenses
Explanation
In the manufacturing account format, Prime Cost represents the total of all direct costs, which includes the cost of materials consumed, direct labour (wages), and other direct expenses.
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