Multiple choice

Directions: Choose the correct option and complete the sentence.

Prime cost - Direct expense - Direct labour =

  1. Direct material

  2. Indirect material

  3. work cost

  4. Cost of production

  5. Cost of sales
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Since Prime Cost = Direct Material + Direct Labour + Direct Expense, rearranging the formula gives: Prime Cost - Direct Expense - Direct Labour = Direct Material.

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