Prime cost is one of the following?

A. expenses which can be identified with an allocated to cost centers
B. aggregate direct material cost, direct labour cost and variable direct expenses
C. the cost taken into account in the production process whether direct or indirect
D. the cost of commodities supply to an undertaking

Correct Answer:

Option B – aggregate direct material cost, direct labour cost and variable direct expenses

Explanation

prime cost is the direct cost of a commodity in terms of the materials and labour involved in its production, excluding fixed costs.