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    Question

    The aggregate of only those costs that can be

    specifically and directly traced to each unit of output is termed as _______ 
    A Conversion Cost Correct Answer Incorrect Answer
    B Prime Cost Correct Answer Incorrect Answer
    C Factory Cost Correct Answer Incorrect Answer
    D Cost of Production Correct Answer Incorrect Answer
    E Marginal Cost Correct Answer Incorrect Answer

    Solution

    Prime Cost is the total of all direct costs incurred in the production of a product. This includes direct materials, direct  labor , and direct expenses.  
    P rime Cost =   Direct Material + Direct Labour + Direct Expenses  

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