The difference between the factory cost of production and the prime cost of production is?

  • A direct materials
  • B direct labour
  • C selling expenses
  • D overhead
jamb 1999accounting

The correct answer is D. overhead

The prime cost of production includes direct materials and direct labour, while the factory cost of production includes the prime cost plus manufacturing overheads. 

Manufacturing overheads include indirect materials, indirect labour, and other indirect costs associated with manufacturing the product.

Therefore, the difference between the two is the overhead cost

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