O-LevelAccountingAccounting procedures7707/12 · May/June 2021 · Q281 Mark

How does a manufacturer calculate prime cost?

Adirect material + direct labour

Bdirect material + direct labour + direct expenses

Cdirect material + direct labour + direct expenses + factory overheads

Ddirect material + direct labour + factory overheads

✓ Correct answer

A: direct material + direct labour

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Topic: Accounting procedures, O-Level Accounting (syllabus 7707). Multiple choice, 1 mark.
Source: O-Level Accounting, May/June 2021 Paper 1 Variant 2, question 28.

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