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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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