The correct answer is A. Prime cost + Factory overheads.
Prime cost is the direct cost of labor and materials used in the production of a product. Factory overheads are the indirect costs of production, such as rent, utilities, and depreciation.
The cost of production is the total cost of all the resources used to produce a product. It includes prime cost, factory overheads, and other indirect costs, such as marketing and distribution costs.
Option B is incorrect because it includes administrative overheads, which are not directly related to production.
Option C is incorrect because it includes direct costs and indirect expenses. Direct costs are included in prime cost, and indirect expenses are not included in the cost of production.
Option D is incorrect because it includes prime cost and administrative overheads. Administrative overheads are not directly related to production, and they are not included in the cost of production.