Lawal and co makes blocks and sell to builders.
In computing prime cost, which of the following costs would be considered appropriate?
The correct answer is A. Cement, sand and carriage outwards
Prime cost is the sum of the direct costs of production. For a manufacturing company, this typically includes the cost of raw materials, direct labour, and factory overhead.
In the case of Lawal and Co, which makes and sells blocks to builders, the prime cost would include the cost of the cement and sand used to make the blocks, as well as the cost of transporting the blocks to the customers (carriage outwards).
Previous question Next questionWhat is Exam without Practice? With our customizable CBT practice tests, you’ll be well-prepared and ready to excel in your examsStart Practicing Now
