- Home/
- AE & JE Exams/
- Article
Prime Cost Plus Production Overhead is known as
By BYJU'S Exam Prep
Updated on: September 13th, 2023
Prime cost plus production overhead is known as
(a) Total cost
(b) Selling cost
(c) Production cost or Factory cost
(d) Direct Cost
Ans: (c) Production cost or Factory cost
Table of content
Prime Cost Plus Production Overhead is known as Production Cost or Factory Cost
Prime or Direct cost:
Direct costs = Direct Material + Direct Labour + Direct Expenses
Factory overhead or factory expenses:
Factory overhead =Indirect material +Indirect labour +Indirect expenses
Indirect material cost includes the cost of cutting fluid, grease, lubricants, stationery, cotton jute etc
Indirect labour cost includes the cost of a watchman, supervisor, higher officer etc
Indirect expenses include the cost of rent, land, telephone bill, electricity bill etc
Factory cost:
Factory cost = Prime cost + Factory overhead
Total Cost:
Total cost = Factory cost + Marketing Advertising, Transportation cost etc.
Selling cost:
Selling cost = Total cost + Profit
Summary
Prime Cost Plus Production Overhead is known as
Prime cost plus production overhead is known as Production cost /Factory cost /manufacturing cost.
Related Questions: