The correct answer is: D. factory cost.
Office and administrative expenses are indirect costs that are incurred in the overall management of a business. They are not directly related to the production of goods or services, but they are necessary for the business to operate. Examples of office and administrative expenses include rent, utilities, insurance, and salaries for office staff.
Factory cost is the total cost of producing a product. It includes direct costs, such as the cost of materials and labor, as well as indirect costs, such as office and administrative expenses. Factory cost is used to calculate the cost of goods sold, which is an important figure in financial statements.
The other options are incorrect because they are not types of costs that are used to calculate factory cost. Material cost is the cost of the materials that are used to produce a product. Labor cost is the cost of the labor that is used to produce a product. Prime cost is the sum of material cost and labor cost.
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