In cost accounting, 'Works Cost' (also called Factory Cost) is computed as:

The cost statement in cost accounting builds progressively: Direct Materials + Direct Labour + Direct Expenses = Prime Cost. Prime Cost + Factory/Works Overheads (indirect manufacturing costs such as factory rent, power, depreciation of plant, indirect labour) = Works Cost, also called Factory Cost or Manufacturing Cost. Works Cost + Office and Administration Overheads = Cost of Production. Cost of Production + Selling and Distribution Overheads = Cost of Sales. Works cost represents the total cost incurred within the factory and is used to determine the cost of goods manufactured. Option A incorrectly adds administration overheads, which come at a later stage in the cost statement.