The factory cost of producing goods is made up of

  • A prime cost and factory overhead
  • B prime cost and office overhead
  • C raw materials consumed and fixed cost
  • D Raw materials and administrative overhead
jamb 1995accounting

The correct answer is A. prime cost and factory overhead

The factory cost of producing goods is typically made up of the prime cost and factory overhead. 

The prime cost includes direct materials and direct labour costs involved in manufacturing an item.

The factory overhead includes all the indirect costs that are incurred in the production process.

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