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Question

The total of all direct expenses is known as __________ cost.

A
Prime
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B
Works
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C
Production
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D
Both A and B
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Solution

The correct option is D Prime
Prime Cost may be defined as:

Opening stock of RM
Add: Purchased of Raw Material
Less: Closing stock of Raw Material
Add: Direct Labor
Add: Direct Expenses
--------------------
PRIME COST xxxx
--------------------

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